The market for confectionery products in India

A report prepared for

The National Confectioners Association
January, 2005

Promar International 1101 King Street, Suite 444 Alexandria, VA 22314 USA Tel:(703) 739-9090 Fax:(703) 739-9098

The market for confectionery products in India

A report prepared for The National Confectioners Association

CONTENTS
EXECUTIVE SUMMARY SECTION 1: 1.1 1.2 1.3 1.4 SECTION 2: 2.1 2.2 2.3 INTRODUCTION Objectives Methodology Report organization Exchange rate used INDIA: COUNTRY BACKGROUND General background Economic development and reforms India’s people 2.3.1 Population and main socio-economic indicators 2.3.2 Age 2.3.3 Income 2.3.4 Urbanization Religion Consumer spending and food purchasing behavior THE CONFECTIONERY MARKET IN INDIA TODAY General background The confectionery sector 3.2.1 Market size 3.2.2 Some specific market characteristics 3.2.3 Manufacturers and key players 3.2.4 Market snapshots for 2004 3.2.5 Market shares and brands Market segments I 1 1 2 2 2 4 4 5 7 7 8 9 11 12 13 16 16 17 17 19 20 21 23 26

2.4 2.5 SECTION 3: 3.1 3.2

3.3

3.4

3.5

3.6 3.7 3.8 SECTION 4: 4.1 4.2 4.3

3.3.1 Chocolate confectionery 3.3.2 Sugar confectionery 3.3.3 Chewing gum 3.3.4 Sugar-free confectionery Confectionery imports 3.4.1 General trade information 3.4.2 Key suppliers, types and brands of imported confectionery Consumption 3.5.1 General information 3.5.2 Demographic and lifestyle considerations 3.5.3 Brand and origin awareness and perceptions Pricing Seasonality Market forecast DISTRIBUTION CHANNELS Overview Domestic production Imports 4.3.1 Ports of entry for imports 4.3.2 Geographical and logistical considerations 4.3.3 Handling of imports 4.3.4 Business relationships along the distribution chain Wholesale and retail 4.4.1 Role and key players 4.4.2 Key retail players 4.4.3 Industry trends affecting or altering the structure of retail food sales 4.4.4 Types of product promotions used MARKET ENTRY Tariffs, import and customs regulations 5.1.1 Import and custom regulations 5.1.2 Import tariffs 5.1.3 An example Food safety, packaging, and labeling requirements CONCLUSIONS AND RECOMMENDATIONS General prospects Recommendations Success stories INDUSTRY CONTACT INFORMATION Confectionery importer-distributors and wholesalers Key retail candy accounts across marketing channels

26 28 30 32 33 33 34 38 38 39 42 43 44 44 45 45 45 47 47 47 48 48 50 50 52 54 55 56 56 56 56 58 58 60 60 61 62 64 64 69

4.4

SECTION 5: 5.1

5.2 SECTION 6: 6.1 6.2 6.3 SECTION 7: 7.1 7.2

Nutrine Confectionery Co. ITC Limited Hindustan Lever Limited The CAMPCO Ltd Lotus Chocolate Company Limited APPENDIX 3: TRADE INTERVIEWS 73 77 77 79 81 83 85 87 89 90 92 94 95 97 99 101 .APPENDIX 1: INDIAN SWEETMEATS APPENDIX 2: KEY MANUFACTURERS’ PROFILES Cadbury India Limited Nestle India Limited Lotte India Corporation Ltd. Pvt Ltd Candico India Limited Perfetti van Melle India Pvt Ltd Parle Products Pvt Ltd Wrigley India Pvt Ltd and Joyco India Pvt Ltd Gujarat Co-operative Milk Marketing Federation Ltd.

1 billion • Total population population lives in rural areas where 1. consistent with the positive reports and forecasts for increasing incomes. consumer expenditure on food is increasing. cultural. Overall.900 incomes are significantly lower. in 2001 it removed all quantitative restrictions. a very large proportion of India’s over 1 billion population continues to live in extreme poverty.3% • Literacy rate. Typical for poorer nations. However.4% • Annual population growth unemployment rates are higher and • GDP per capita (purchasing power parity) $2. linguistic. and religious diversity. About 70% of the 1. Indian consumers spend a significant proportion of their income on food. The text box • People with access to safe drinking water 88% highlights some socio-economic 472 million • Labor force indicators of India and illustrates the 9. it is home to over one billion people of considerable economic. adult male toward urban areas in search of work 48.5% • Unemployment rate Source: CIA World Factbook. the government continues to discourage imports through both tariff and non-tariff barriers. On the other hand. India became an attractive i . in compliance with WTO commitments. which led to rapid increase of imports to the country. In 25% • People below the national poverty line 64 result. Despite the economic growth. in the mid-1980s India initiated economic reforms which started opening up its consumer markets to the western world. the World Bank seriousness of the economic and social deprivation. The confectionery market in India The confectionery market in India has undergone major changes and growth since the opening up of the economy and liberalization of the investment regime in 1991. However. there is significant migration • Life expectancy at birth (years) 70. Nevertheless. ethnic. the country has managed to maintain economic growth even during the Asian crisis in 1998. India continued to heavily restrict imports through the 1990s.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Executive summary EXECUTIVE SUMMARY India: country background Diverse is the one word that describes India best. adult female and better payment.2% • Literacy rate. After years of socialist-oriented economy and commercial relations oriented primarily to the Soviet block. With an area approximately one-third the size of the USA. Despite the reforms and economic growth. it has the fastest growing middle class in the world and forecasts indicate rapid growth of the consuming class. There is serious disparity between the urban and rural A socio-economic snapshot of India (2004) population in India.

followed by chocolate and sugar confectionery (7. Put into context. Milk Marketing Federation. Parle Products Pvt Ltd.5%).5% and 8% respectively. There is a clear trend of faster sales growth in value terms.000 MT. where penetration is lower than the average for the country. and all agree that there is still large potential for further growth of the confectionery sector in India.. Gujarat Coop. domestic players are increasingly finding a prominent position in the market.8% each). imports of confectionery products have grown rapidly. (10%). are less than 1% by volume and value of US confectionery imports in 2003 alone. Nutrine Confectionery Co Pvt Ltd.8% average annual growth rate) closely followed by the gum segment (9.5%). India’s confectionery market is still very small. India’s total imports for 2002-03 and 2003-04. Most of the large multinationals active in India are also actively marketing to rural India. ITC Foods. Ltd.3 million MT in the US. (16%). followed by chocolate. Ltd. In volume terms gums grow at the fastest rate (8. and bubble gum. to put these figures in some perspective.220 million). This resulted in its steady growth and gradual transformation from a commodity market to a branded products market dominated by multinational companies. CAMPCO Ltd. Sugar confectionery (candies and toffees) has the largest share (50%). Companies are fighting this trend by broadening their consumer base from primarily children and teenagers. to adults as well. In volume terms these figures were 127. Candico India Ltd. ii . 26. many individual players have experienced slower growth in their sales over the last few years. although they remain tiny and only a small part of the overall confectionery market. Cadbury India. and Lotus Chocolates Co. combined. Despite its vast population.2003 period. Hindustan Lever Ltd. indicating that consumers are increasingly ready to pay a premium for higher value products. This trend is partly attributed to the economic slow down that India experienced in 2000-02 and resulting decline in consumer spending. While growth rates in general look rather healthy. while retail sales for 2003 in India are estimated to have been US$562 million (Rs. US$26 billion worth of confectionery products were sold in the US. At the same time. Since import restrictions were eased in 2001. Confectionery products are impulse purchases which would be among the first to be cut out. and Nestle India. Ltd. Wrigley India Pvt Ltd. It is valued at close to US $450 million. The organized confectionery segment in India segment is dominated by the multinational companies. Other important players are Lotte India Ltd. however. at an average annual rate of 9.000 MT in India and 3. is by far the market leader. Ltd. The chocolate segment is the fastest growing in value terms (9. Over the 1998 . confectionery retail sales have grown more than 55% in value terms and 46% in volume terms. followed by Perfetti Van Melle India.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Executive summary place for foreign investment and several large multinational companies entered the market for confectionery products. and is estimated to be 138.

In 2003-04. iii . cookies. Brazil. Indian also has significant gray imports. For comparison. Other leading suppliers that experienced significant growth in exports to India in 2003-04 included Australia. 15%. US confectionery exports to India experienced significant growth from 2002-03 and more than doubled in value and increased roughly 80% in volume. many of who indicated this as a preferred route. In 2003-04. have grown almost 60% in volume terms and almost 40% in value terms. albeit from a tiny base. However. they remain very small.3lb) for sugar confectionery. and the UK.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Executive summary Retail chocolates and sugar confectionery account for the greatest share of total confectionery imported into India. The figure is lower for chocolates (about 70%). but registered a growth rate of 100% from the previous year. particularly in volume term. per capita consumption of confectionery products in the US is around 25lb.000. For comparison. Experts indicate that sugar confectionery and gum products consumption are driven almost entirely by impulse purchasing. because of its increasing popularity as a gift for various occasions and during the festival season. Imports of bulk chocolate and chewing gum remained very small at roughly US $500. while imports from the third largest supplier.3 million. and of sugar boiled confectionery. However. Consumption Confectionery products have very low penetration in the Indian market.7 million. Malaysia and Singapore have been the leading suppliers of confectionery to India in terms of both value and volume. Imports of sugar confectionery fell close behind. increasing more than 500% in value and more than twice in volume.7lb) for chocolate and around 600g (1. in their effort to increase consumption and product penetration. respectively. the two countries accounted for more than 20% in value and more than 30% in volume of the total confectionery import market in India. Spain. considered to have only modest penetration. Estimates suggest that chocolate penetration has been only 5% in 2000. imports of retail chocolate totaled close to US $5.000 and US $400. Even considering the more developed urban market alone. Nevertheless. not just an indulgence. In addition to the regular import channels. totaling US $3. have reached 56% of Indian households. As a result. Almost all confectionery purchases in India are believed to be impulse driven. It is estimated to be just over 300g (0. in the last year. actual imports are probably larger than that shown by official statistics. the UAE. In the last two years. the category reaches just 22% of the consumers. Confectionery exports from Spain registered the largest growth. marketers have started to promote some products as appropriate snacks. The growing importance of the UAE and the port of Dubai as center for export and re-export of confectionery products was confirmed by our suppliers. The US is a relatively small supplier of confectionery to India and accounted for only 4% in value and 3% in volume of India’s confectionery imports in 2003-04. imports from Singapore have shown decline. In result. In result. annual per capita consumption is also very low.

THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Executive summary Brand and origin awareness While domestically manufactured brands dominate the market and consumers have general awareness about them. Imported brands are presented much better than Indian ones. US brands are less known than European ones. Thus frequently the global brand products may be manufactured at various places without consumers being aware or interested in the actual place of origin. while European and US products cater to the upscale market segments. in the rural areas. There is a clear distinction between the larger mass market where price pressure is significant and the upscale niche market. Indeed. where brand and country of origin really matter to consumers when making purchasing decisions. • • • • • Pricing The Indian market is very price sensitive. We were consistently hearing similar comments from our respondents from all categories – manufacturers. Attractive packaging is very important for the brand image. Imported products in general are considered to be of higher quality than the domestic ones. and generally not interested in where a product has been manufactured as long as they are familiar with the brand. These can be summarized as follows: • The urban market is brand conscious. Indians associate quality with good packaging. iv . many of the large multinational companies have production faculties throughout the world and various distribution arrangements for different countries/regions. Except for the top quality chocolates. However. Tiffany is a popular brand with mass appeal mostly manufactured in the UAE. “in the metro areas consumers associate brand names with quality. Products from SE Asia and South America are more oriented to the mass market. It is in the upscale niche market segment. Consumers are looking for known brands with good quality images. As one respondent put it. the rural market is price conscious. consumers associate it with the UK. consumers associate higher prices with better quality. Consumers as well as the trade have generally have a good perception about the quality of US products. Mars and Hershey’s are the only US brand names with broader recognition in India. and retailers. importers and distributors.” The upscale niche market is focused on brand and image quality. price is secondary to quality and brand image. where although important. foreign products and brands are becoming increasingly known. This trend is particularly noticeable in the urban areas and among middle and upper class consumers. For example. consumers are usually not aware. Swiss and Belgium chocolates are considered the crème de la crème.

Perfetti. and new products like mints. Most major companies including Cadbury’s and Nestle are strongly pushing sales of their Rs. On the other hand. 5. 130. Boxed chocolates show the greatest potential for growth within the chocolate category. Lollipops is a new category and has sparked lots of interest among children. 5 categories. lollipops and chewing gum. there are different ranges of prices for imported products. For example. chewing gum. the niche for more upscale products will also offer new opportunities for branded products. 100gm Lindt chocolate sells for around Rs. it is 16%. 1. Some chewing gum and bubble gums are in Re. 12 categories. 7. Market forecast The confectionery market in India is expected to continue to grow at healthy rates. The mass market will continue to be very price sensitive pushing manufacturers to price discounting and offering smaller packages in order to continue penetrating the rural market. Asian and South American products are usually moderately priced. storage. Wrigley’s. such as transportation. in the more upscale market segments. For sugar confectionery (without cocoa). etc. Candico. Imported confectionery products will play a role primarily in the urban areas. so will imports. There is big difference in the prices of domestic and imported products. The general rule is that domestic products are the cheapest. are from the Rs. and refrigeration facilities. As the market grows. Parle. as well as boxed assortments will grow at the fastest rates. the category is expected to continue growing in the coming years. 1 price categories.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Executive summary Most confectionery brands of Nutrine. country of origin. with the costs of distribution being rather high. 2 and Rs.25 to Rs. Rs. Rs. Experts expect that the adult market will offer an additional niche for some products. from the top end products. Distribution The Indian food distribution system is characterized by a large number of intermediaries and relatively poor infrastructure. Lotte. for chocolate confectionery. and Rs. while European and US products are the most expensive. It has low levels of efficiency. Then. Manufacturers and v . An important factor that affects the price of the products is the Central Excise Duty payable by the organized/registered manufacturers is as follows. Nevertheless they will remain small and with limited impact on the total market. medicated confectionery and power mints are also expected to grow rapidly. depending on the brand. particularly among the young adults segment. and product itself. 0. it is 8% (recently reduced from 16%). Sugar confectionery will remain the largest segment.

convenience stores. India’s retail sector is highly unorganized. Although this sector is thought to be in its infancy. Importing confectionery in India is primarily dependent on the location of the importer and the markets they serve. in many cases. including confectionery. Market access The import tariffs for confectionery products vary from 30% to 45%. supermarkets. importers may use the ports at Chennai and Kolkata. If imported confectionery is destined primarily to South India or North India. known as kiranas. over the last five years.fas.gov/gainfiles/200407/146107003. two importers that we interviewed imported by air. In 1998. For many importers. The latest issue of USDA’s FAS report on India Food and Agricultural Import Regulations and Standards from July 2004 (GAIN report # IN4077) provides excellent background and all necessary information. JNPT is the easiest port to distribute products not only to Mumbai and Delhi. Confectionery products are predominantly purchased in small independent food stores. All imported products should fulfill the requirements of the Indian Food Law and the Standards of Weights and Measures Act. but also to other major commercial and metropolitan areas. Nevertheless. though this is a more expensive option. rapid growth is expected over the short to medium-term. there are 16% additional CVD duty and 2% Custom Educational Cess. India’s organized retail sector remains the preferred distribution channel for branded and imported products.pdf vi . However. this is the JNPT port at Mumbai. creating greater opportunities for imported confectionery products. from roughly 6% to 8%. Most importers rely on distributors or wholesalers to reach retail outlets and confectionery manufacturers often rely on C&F agents or dealers to work with the wholesalers and distributors. the share of retail sales by supermarkets and hypermarkets has also increased. Most of the importers operate warehouses near the major ports and. However. the retail sector is changing and the organized sector is gaining ground with the emergence of supermarkets and hypermarkets in metropolitan India. confectionery retail sales in convenience stores were virtually non-existent. Most confectionery imports are imported into India by sea. In addition. but today these stores account for 2% of confectionery sales. During the same period. and hypermarkets have played an important role in the distribution of confectionery products. The report can be viewed at: http://www.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Executive summary importers rely heavily on the middle man for the distribution of confectionery products in India. as small independent stores are the main outlet for consumer purchases.usda.

although overall sales will remain modest. The United States along with Western Europe are perceived as offering highest quality. particularly for chocolate are considered to the best. Supermarkets have emerged and started to gain power over other retail formats.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Executive summary Overall. Conclusions The Indian market for confectionery products has undergone significant changes over recent years. The availability of imported products has also been rapidly rising since India liberalized its imports regime in 2001. where European brands. With these changes in mind. a few have products targeting premium products. Nevertheless. Indian confectioners are increasing their efforts in product development and promotional activities. we expect that: • The share of imported confectionery will continue to increase over the next several years. We expect to see growth of new and novelty products. the very low penetration and consumption levels provide ample opportunities for growth and make competition less of a constraint. While penetration and consumption levels are still very low. The popularity of chocolate products. who would be able to provide the necessary guidance. While most domestic companies also focus their new product development efforts on the mass market. Nevertheless. This trend will be more obvious in the urban areas among middle and upper class consumers. Indians associate imported products with higher quality. overall sales. On the other hand. offering higherend foreign brands growth opportunities. the best approach for any potential exporter to India is to establish contacts and work with experienced importers and distributors. particularly boxed assortments for gifts. and exporters will face stiffer competition from the domestic sector. The distribution channels have also undergone substantial changes. will continue to increase. and particularly sales of higher value premium products have increased. However. although there is very low awareness of US confectionery products and brands. Indians’ taste will continue to become more westernized and more quality conscious. they are still very small leaving ample opportunities for further growth. and therefore respond positively to confectionery imports. for US exporters competition will be an important factor in the upscale niche segments. such as mint and medicated • • • vii . The sugar confectionery will remain the largest confectionery segment.

product catalogues. U. with a larger number of affluent consumers exposed to western influences.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Executive summary confectionery (with added vitamins and/or other minerals). as well as the new to the country sugar-free confectionery categories. They may use the list of industry contacts provided in Section 6 or obtain contact through the US Embassy in New Delhi. as well as better developed infrastructure. This will lead to new products and marketing strategies aimed at them. are most appropriate for introduction of new US products that are generally higher priced than domestic and some imported products. Marketing and promotion expenditures for confectionery products will increase and distributors will require promotional support from manufacturers. exporters should be willing to offer as much as possible support. product samples. it is of critical importance to select the right partner. There will continue to be opportunities for new products that appeal to the young consumer. India remains a very price sensitive market and appropriate pricing is key to the success of new products. Mumbai and/or New Delhi are the most appropriate entry markets for US exporters. as they will be critical to ensuring presence of their products on retail shelves. A proper. • • • • viii . These cosmopolitan cities. and price lists. formal introduction is important for a new entrant to make effective and productive contacts at potential partner firms. exporters may directly contact potential importers and distributors to select their partner(s). • While the traditional targets for confectionery products have been children and young people. particularly in the initial phase of market entry. The ever-present stimulus of novelty and fashion. Importers and distributors may have limited financial and human resources. Importing is a relatively new business in India. • • Recommendations • Potential exporters should carefully select trading partners from among the Indian importers and distributors. increasing number of marketers have seen growth opportunities in targeting the adult consumer segment. Therefore. encouraged by continuing exposure to western culture will keep the doors open for new products and new suppliers. and many importers may lack the knowledge and experience to ensure successful distribution of the products they deal with. The typical way of introduction is to send them company brochures. US exporters should carefully discuss their product pricing and positioning with their chosen partners in India. Thus U.S.S.

1 . and modernization of the retail sector. such as the changing trade policy climate. 1. the decision of the National Confectioners Association (NCA) to research the Indian market for confectionery products and look at the opportunities for US exporters in India seems appropriate and timely. consumption of confectionery products is relatively low and product penetration is still very limited. Despite this. For these reasons. growing rapidly. This report aims to provide description and understanding of the Indian market.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Introduction SECTION 1: INTRODUCTION The Indian population represents roughly one-fifth of the global population. there are clear signs of movement in the food systems and indications that the potential market is immense. by opening up its trade policy regime. increasing urbanization. there are a number of factors suggesting more opportunities in India in the future. Though change is relatively slow. observers have noticed opportunities for growth of the market and increasing potential for imported chocolate and other confectionery products. consistent economic growth. Moreover. Market information necessary for making informed decisions regarding market opportunities for their products. We review the general economic and commercial environment and the developing situation in the Indian market for confectionery products. and Contact information for importers and distributors to enable them to begin enquiries about exporting opportunities. However. India has attracted the interest of many seeking new investment and market opportunities in food and agriculture. rapidly growing middle class. At the same time. and while still immature. Many are poor and suffer deprivation.1 Objectives The specific objective of this research has been to provide US confectionery manufacturers and potential exporters to India with: • • • A clear understanding of the Indian markets for confectionery products as they are today and the future market conditions in India. We also examine the competitive market conditions and review the general prospects for US products and potential entry strategies for US exporters.

Section 5 reviews the market access issues. food safety. 13 leading importers. Section 4 look at the distribution of confectionery products in India. the key players. and the way it works. the bases of competition. packaging. The core of the study has been based on personal interviews with various representatives of the trade. including major candy chain stores and supermarkets. we had face-to-face interviews with 24 executives.2 Methodology We have used a combination of desk research and trade interviews. A full list of contacts is given in Appendix 3. Additional information is provided in the report appendices as follows: • • • 1. and label requirements. For descriptions of domestic market developments we provide values in Indian Rupees (Rs). we gained a view of the status quo in the market.3 Report organization The report is organized as follows: • • • • • • Section 2 provides general background information about India. These gave us a very broad perspective of the market. and 6 retailers. Appendix 2: profiles of the main players in the Indian confectionery market. and the forces for change. Section 3 reviews the Indian confectionery market by sector. market system. Overall. and Appendix 3: list of the respondents to our trade interviews. 1. and Section 7 lists some important industry contacts. In particular.4 Appendix 1: brief description of the Indian market for sweetmeats.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Introduction 1. Section 6 provides our conclusions and recommendations for US exporters interested in the Indian market for confectionery products. as follows: 5 leading manufacturers. Our interviews covered a wide range of issues. such as tariffs and duties. Exchange rate used In the report we have presented data in US dollars when it refers to total market and includes imports. 2 .

The peak was in 2002. In 1995 the value was 32 and this has steadily decreased over time (see Figure 1). At the time of writing this report. Figure 1: Average annual exchange rate: Rs per USD 60 50 40 Rs/US$ 30 20 10 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 3 .5 Rs.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Introduction During December 2004. it is about 43. there were 45 Rupees to 1 US dollar. when the value of I US dollar was almost 47 rupees.

After almost two hundred years of British colonial rule. the Indian food market has several layers of complexity.190 sq. cultural. and Burma (Myanmar). Despite this diversity in food consumption. some market segments in India are sufficiently large to attract the attention of companies willing to export to India or invest in the country.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background SECTION 2: INDIA: COUNTRY BACKGROUND Figure 2: India Diverse is the one word that describes India best. it has 28 states and 7 union territories (see Figure 3) with New Delhi being the capital. km (1. At this stage in the country’s development. With an area approximately one-third the size of the USA. This section provides a brief description of the Indian economy today and depicts the diversity of India’s people in a way that can be used in later sections to determine the potential market opportunities for US confectionery products. By land it shares borders with Pakistan. regions and income strata are simply too diverse for quick and simple categorization and generalization. Figure 3: India – political map 2. which need to be fully understood by the outsider. India gained its independence in 1947. India considers itself the largest democracy in the world. bordering the Arabian Sea and the Bay of Bengal. Bhutan.148. there are relatively few food products consumed by the entire Indian population. Food consumption differences between religions. In short. linguistic. Bangladesh. Today. ethnic.000 sq miles) in Southern Asia. it is home to over one billion people of considerable economic.1 General background India occupies a land territory of 2. Scale alone catches the attention of any company looking for opportunities of new investment or exporting. Nepal. China. and religious diversity.973. It is a 4 .

The reforms started with some tentative steps to open up the Indian marketplace to western products . the capital of Maharashtra. there are also some serious concerns. The India south is well developed and relatively affluent with strong agriculture and industry. The turnaround and reform of the Indian economy began in 1986 when the government initiated policies. Restrictions on imports were relaxed. The region is the leader of the Indian IT sector. but that power is actually exercised by the prime minister (head of the majority party in the federal Parliament) and his council of ministers. It also has good coastal and land transportation infrastructure. the east and northeast regions are the least developed and poorest with a huge gap between the urban and rural populations. and ethnic and religious strife. although very slightly. which started opening its consumer markets to the western world. The Indian north is more populous than the rest of the country. with Uttar Pradesh being the most populous state in India. Despite being a founding member of the General Agreement on Tariffs and Trade (GATT).both industrial and consumer. These include the ongoing dispute with Pakistan over Kashmir. India’s focus was mainly toward developing commercial relations and trade with the Soviet bloc. and Bangalore and Hyderabad are considered the Indian equivalents of the US Silicon Valley. As a 5 . who are appointed by the president. On the other hand this region is the major source for some natural mineral resources. and output. India’s inward looking socialist-oriented economic policies gave it a minor presence on the world economic stage. Mumbai. In theory. such as coal. Despite India’s impressive gains in economic development. investment. This combined with the relatively higher incomes make the Indian South a typical entry point for new imported products. is the financial capital of the country and a very important center for industrial activity. 2. and bauxite. serious overpopulation.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background parliamentary federal state with a president who is elected for a five-year term by the elected members of the federal and state parliaments. iron. The India west is the best developed part of the country with comparatively higher per capita incomes. environmental problems. The states Maharashtra and Gujarat are considered the industrial hub of India and attract most foreign investment. The north has predominantly agricultural activity.2 Economic development and reforms Until the mid-1980s. Industrial development is moderate. as well as a favorite test marketing region. the president has full executive power. extensive poverty. and Punjab is the leading agricultural state in the country. Opposite to the Indian west.

2% in 1999 and 2000 (real GDP for 2000 was $459. imports and exports reached $50. the government since 1996 has moved more cautiously on reforms – encouraged in part by the Asian crisis of 1998 – consolidating and institutionalizing the positive aspects and reworking the negative ones. The new government was not particularly reform-oriented. trade with the western world started increasing. Thereafter. Rigidities in the domestic economy resulted in a serious slowdown in growth and a crisis of confidence. As seen from Figure 4. Today the import duties for most consumer food products range from 31% to 52%. Prior to the economic reforms in 1991. which undermined the credibility of the government and their reforms.5 billion. 20 4(e 0 20 Source: Datamonitor and World Bank (for 2002 and 2003) 6 .3 billion. Import tariffs have been curbed per World Trade Organizations (WTO) commitments. growth has remained over 5%. Imports were further liberalized. the beginning of another phase of development. India’s highly regulated industrial policy was changed drastically as controls were scaled down.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background result. they will have grown further. However. However. After dropping to a low 1. while trade with the Soviet bloc fell. with the sharp rise of imports by 1990.5 billion and $42. India’s imports were $27.9 billion and exports were $18. In the early 1990s. Nonetheless. gross domestic product (GDP) has grown rapidly over the last 10 years. The momentum of liberalization slowed as a result of scandal. this crisis provided the much-needed stimulus for structural adjustment and reform. Since that date. the economy responded positively to the wideranging reform measures to grow at 4.2% in 1992 and to increase to 8% by 1995. but it realized early on that the economic policy changes that had been made could not be reversed. the government continues to discourage imports through both tariff and non-tariff barriers. Furthermore. In April 2001. foreign investment in India was only $125 million. reaching 6. and foreign investment was allowed in a wide range of sectors. all remaining quantitative import restrictions were removed. between 1996 and 1997. However. India’s external debt almost tripled and its foreign exchange reserves dwindled to below US$1 billion. The environment for domestic and foreign investment and trade has been progressively liberalized. respectively.7% growth in 1991. Nonetheless.2 Figure 4: GDP growth rate 9 8 7 6 percent 5 4 3 2 1 0 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 19 00 20 02 20 ) 03 st. The voters elected a new government in 1996. foreign investment reached almost $6 billion and in 2000.

1 In contrast to the rest of Asia. India has shown a healthy growth over the last 10 years and even during the Asian crisis managed to maintain much better economic indicators than many other Asian countries.8%.000 languages spoken in the country.3. despite these encouraging signs. representing one-fifth of global population.1 India’s people Population and main socio-economic indicators The Indian population is close to 1. the primary tongue of 30% of the population. with a per capita GDP of roughly $545 per annum. Gujarati. Korea –5. Bengali.5% in 1995. Indonesia –13. nearly 400 of which are spoken by more than 200. India has managed to maintain economic growth despite surrounding economic turmoil.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background billion). without the resources to buy even basic foods. Despite the differences the trend is clear. is India’s national language. India’s economy suffered little from the economic meltdown in 1998. only 18 are officially recognized. Reserve Bank of India data shows GDP growth to have dropped to 0.1%. and this growth has not been at the expense of unruly inflation. For example. However. many in India are not reaping substantial economic rewards. India also has a very large proportion of poor people. 2. liberalization has encouraged foreign investment in the country.g.8%. While the country consistently carries a trade deficit. it experienced an estimated real growth rate of 5. Urdu. In sum. 7 .8% in 1991 and the World Bank shows growth of 7. in that year. More than 400 million live with less than $1 per day. The text box below highlights some socio-economic indicators of India and illustrates the seriousness of the economic and social deprivation. In 2003. and Marathi.3 2.3%. Tamil. and Hindi. In addition. There are more than 1.000 people. English which enjoys associate status is the most important language for international and commercial communication. However. Almost 40% of India’s people are illiterate. growth in exports has been significant. In fact.1 billion people. Telugu. In addition. GDP growth increased to 8% and estimates for 2004 suggest that it will be about 8. compared with the decline experienced in most other Asian economies (e. although such is the political environment that this wind blows hot and cold. Various States also have their own official languages and some of the most widely spoken ones are Punjabi. although the overall situation in the country has improved markedly in the past decade. 1 Different sources give slightly different figures for the GDP growth. and Thailand –10%).

As life expectancy increases. as seen from the graphs in Figure 6. adult female 1. processed foods and give greater importance to quality.3% Percent of population with access to safe drinking water (Year 2000) 88% Labor force Unemployment rate 472 million 9. population growth slows down.3. particularly those in higher income 15 . the World Bank 2. adult male Literacy rate. The younger generation of Indians is more westernized in their eating habits than older generations. Nevertheless. only 5% of the population is older than 65 and 65 years and over over 30% is under 15 years of age.900 25% 64 70. and convenience. time. 32% Generational differences can often be translated into eating patterns.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background • • • • • • • • • • A socio-economic snapshot of India (2004) Total population Annual population growth GDP per capita (purchasing power parity) Percent of population below the national poverty line Life expectancy at birth (years) Literacy rate. Younger professionals are more open to 63% experimenting with food products.2 Age Figure 5: Population distribution by age The Indian population is young. As seen from Figure 5. the US 5% Census Bureau International Database indicates that Under 15 years just over 50% of the population is younger than 25.64 years groups. the Indian population will gradually start to age.4% $2.2% 48.1 billion 1.5% Source: CIA World Factbook. Indeed. India will remain a predominantly young nation for the foreseeable future. Source: CIA World Factbook They consume more packaged. as their lifestyles resemble their counterparts in western societies. 8 . and the population’s economic conditions continue to improve. although by 2025 the proportion of the population younger than 25 is expected to be down from 50% to about 40%.

analysts. According to the NCAER.3. The good news. The Indian Consumer Market 1997 to 2007. the National Center of Applied Economic Research (NCAER) in India has very good news for the country’s economy. Based on its forecast.3 Income Despite the progress in reducing poverty over the last years. is that the high income class is expanding fast. Survivors (upper middle income). however. and the low income class is shrinking rapidly. In a recent publication. The consuming class comprises the first four categories. and the economic destitute will decline three fold. Its reports are widely used for decisions made by marketers. 9 2 . this group The NCAER is an old and highly respected institution in India. known for the accuracy of its forecasts.2 It concludes that for the covered period the very rich will grow six fold. the top four segments of the population constituted a market of over 200 million people (about 20% of the population) in 1997. Each segment of the Indian population offers distinct growth and marketing opportunities. India remains a very poor country with vast disparities between the different income groups in India. Aspirants (lower middle income). middle income classes are bulging in size (especially in rural India). economists. and investors.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background Figure 6: Population pyramids in India (1995 – 2050) 2. The NCAER breaks the population into five groups: Rich (high income). the consuming class will triple. Climbers (middle income). and Deprived (low income and poor).

4%.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background should grow to well over half a billion people by 2007. color televisions. 57%. the punch-line of the NCAER forecast might well be the following: • By the year 2007. this figure varies from 1. 94%. pressure cookers. 77% will have refrigerators. Nevertheless. The NCAER’s report predicts that over the reviewed period the number of aspirants and deprived will decrease significantly as people shift up and into the growing ranks of the consuming class.000 a year! The development of a market segment with the economic resources to express a choice represents an opportunity for US exporters of products. down from over 30% in 1998. the combined numbers of the upper-classes (annual income between Rs. In summary. and electricity is available in most households. two wheelers. Today. is a predicted fall in population growth.2%.215.45. NCAER forecasts are made on the basis of the following assumptions: the economy will be growing by 7%. 100% will have more than one wrist watch. This expected prosperity. 10 . roughly one-quarter of the population is living below the nationally defined poverty line. Many have found it hard to believe that the economy will touch and stay at 7% (although it has exceeded this figure in 2003 and 2004). or that electricity can be a presumed a stable service (although power sector reforms which are currently underway can bring in efficiencies). and the consequent rise in disposable incomes.7 members. Going by NCAER’s assumptions.215. the downward trend is clearly visible.3 The combination of all these factors has resulted in higher per capita income.000 and Rs. will not simply be the result of investments.45. Simultaneous with the rise in economic growth.000+) will outnumber the households with less than Rs. This ‘consuming class’ segment is the focus of attention for aspiring branded food and beverage companies. in the year 2007: • • • • • • 40% of the house-holds will have washing machines.4 to 1. 3 Depending on the source. the average Indian household has 5. creation of jobs. The decline of the number of poorest people observed over the last five years is a positive sign in this direction. In the 1990s the population grew at about 2. A major portion of the Indian population has very low incomes. and 61%. while it has now declined 1.7%.000) and the 'very rich' (Rs.

THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background

2.3.4

Urbanization Figure 7: Population growth projections
1,600 1,400 1,200 1,000 800 600 400 200 0 2000 2005 2010 2015 2020 2025 2030 Rural Urban

One of the most significant demographic developments in India is the shift of the rural population to urban centers, caused primarily by the underemployed agricultural laborers who move to towns and cities in search of work. However, despite the rapid growth of urban population, India is still a primarily rural country with about 70% of the population living in rural villages. As Figure 7 shows, it is expected that the urban population will continue to grow at least 4% per annum, while the rural population will decline.

Million

Source: United Nations

The migration towards the urban centers has also expanded smaller towns and cities resulting in their growth and further development. Today there are about 35 Indian cities with a population exceeding one million, compared to about 25 cities in 1997. The rapidly developing economy is reaching smaller cities creating a “swelling base of affluent, upwardly, mobile consumer with the same needs, wants, and desires as the residents of bigger cities”, according to KSA Technopak, India’s largest management consulting company. This observation is confirmed by NCAER’s research, which indicates that over half of the 10.7 million households with income of less than Rs. I million ($23,000) live in smaller cities. But even more, the report also indicates a big rise in number of the rich households with incomes of Rs. 1 to 5 million in the smaller cities. Overall, in the urban areas, most social-economic indicators are significantly better that nation’s average. The urban population is the most important target market for imported products for several reasons. Income is one of the most important factors and it is approximately much higher in the urban areas than in rural India. They are the exclusive market for various imported and more expensive products. According to a recent consumer survey conducted by KSA Technopak, urban consumers spent over US$ 30 billion on themselves in 2002, a 12% year-on-year increase.4 Even more, the company predicts that annual increase in consumer spending will jump to over 15% by 2008. In addition, the major urban areas have a more developed food distribution system, another reason for being an important target for imported food products. Large cities have a variety of
4

The survey is based on a sample of 10,000 four-member families with earnings slightly higher than the average in 20 Indian cities. 11

THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background

restaurants, including westernized chain restaurants and some large chain grocery retailers. Indeed, Knight Frank, India, a major real estate and property management company, ranks India fifth in the list of 30 emerging retail markets globally, and predicts 20% growth for the segment by 2010. The "brand-conscious urban population", which "forms the largest segment of demand for the majority of retailers has grown over 3% a year over the past decade," according to Knight Frank, India who also says that the organized retail segment is expected to grow from a mere 2% to 20% by the end of the decade. This is not surprising, considering that the organized retail sector is growing at 8.5% per annum. Despite its deprived position compared to the urban market, rural markets are also growing. Although on a smaller scale, the economic development has had its impact on rural areas as well. In addition, infrastructural development (including of the service sector) and the improved performance of the agricultural sector will contribute to the further growth of this market segment. However, unlike the increasingly ‘brand conscious’ urban consumers, rural consumers are, and will remain extremely price sensitive. Thus, although they are an increasingly important target for domestic FMCG, including confectionery products, the focus of marketers of imported goods remains on the more affluent and westernized urban segment.

2.4

Religion

Food habits in India are influenced by religious principles. As seen from Figure 8, Hinduism is dominant but India is also the home of a wide range of other religions. Despite the common belief that most Indians are vegetarians, over 75% of the population eats meat. However, there are some taboos on the specific foods and meat in particular. The table below outlines some of the eating practices of the major Indian religions.

Figure 8: Religious breakdown of the Indian population
Christian 2% Muslim 12% Sikh Other 2% 3%

Others, include Buddhist, Jain, Parsi

Hindu 81%
Source: CIA World Factbook

12

THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background

Religion Hinduism

Eating habits All income groups in upper castes are strict vegetarians Lower castes are mostly non-vegetarians Taboo on beef in all castes, as bovines are considered sacred Non-vegetarian Taboo on pork Preference for halal meat Mostly non-vegetarian with no taboos Some sects are vegetarians, and some are not Mostly vegetarian Strict vegetarians

Islam

Christianity Sikhism Buddhism Jainism

2.5

Consumer spending and food purchasing behavior

Although it is the second most populous country in the world and despite the positive forecasts for economic development and increasing incomes, India is still a very poor country. This reflects on the levels of consumer spending and as seen from the table below, South Asia accounts for only a small percentage of the overall global consumer spending despite the large proportion of population it represents.
Consumer Spending and Population, by Region, 2000 Share of World Private Consumption Expenditures 31.5 28.7 21.4 6.7 3.3 2.0 1.5 1.4 1.2 Share of World Population

Region

( percent ) United States and Canada Western Europe East Asia and Pacific Latin America and the Caribbean Eastern Europe and Central Asia South Asia Australia and New Zealand Middle East and North Africa Sub-Saharan Africa Source: the Worldwatch Institute 5.2 6.4 32.9 8.5 7.9 22.4 0.4 4.1 10.9

13

although at relatively slow rates. and in 2003 have accounted for about three quarters of the total sales of packaged foods in India. also put them beyond reach for a large proportion of the population. the according to trade experts. less time available for cooking from scratch) sales of packaged foods are expected to increase. more women entering the workforce. the confectionery products segment has been growing at a healthy rate. down from 44% in 2000. in recent years an increased spending on higher value products has been a noticeable trend. accounting for about a third of the total sales of packaged foods. Indians have a very strong preference for fresh products which are generally perceived to be healthier. with rising incomes and changing lifestyles (e. Sales are generated mostly in the urban areas. Hence. Indian consumers spend a significant proportion of their income on food. Ice cream and frozen foods have been the fastest growing categories. oils. However. it has been estimated that Indian consumers have spent just under 40% of their annual income on food. but bakery products are the largest category. Indians are notoriously conservative about food and many strictly follow traditional ethnic and dietary habits which is a barrier to the growth of the packaged foods sector. It is also expected that rural India will contribute to this growth as average incomes rise and the distribution network and infrastructure develop. consistent with the positive reports and forecasts for increasing incomes consumer expenditure on food is estimated to have been close to Rs.5 Also. however. such as grains.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background Typical for poorer nations. vegetable. The table below shows the retail sales of packaged foods for the 1998 – 2003 period. Most of this is spent on basic food items. However. more westernized younger consumers. packaged foods account for only about 5% of the total food consumption in India. sugar.6% current value growth over 2001. The generally higher prices of packaged foods.g. a 6. Although sales have been modest. 6 billion in 2002. Retail sales of packaged foods (in billion Rupees) 1998 Confectionery Bakery products Ice cream Dairy products Sweet and savory snacks Snack bars 17 72 3 41 4 1999 18 79 4 44 4 2000 20 87 5 48 5 2001 22 96 5 53 6 2002 24 104 6 59 6 2003 26 113 7 65 7 Average annual growth 9% 9% 19% 10% 12% - 5 Source: Euromonitor 14 . pulses. as well as for traditional spices and ingredients.

condiments Baby food Spreads Packaged food Source: Euromonitor 6 1999 3 0.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA India: Country background 1998 Meal replacement products Ready meals Soup Pasta Noodles Canned food Frozen food Dried food Chilled food Oils and fats Sauces. 15 . dressings.3 2 1 3 17 62 10 3 2 266 2001 3 0.3 2 1 2 15 59 9 3 2 245 2000 3 0. canned soups are included in soups and canned food.4 2 1 3 19 66 11 3 2 291 2002 4 0.4 3 1 3 21 69 12 3 2 316 2003 4 0. For example.4 3 1 4 23 73 14 3 2 342 Average annual growth 7% 7% 10% 0% 17% 10% 5% 12% 10% 0% 9% 3 0.3 2 1 2 14 56 8 2 2 225 6 The sum of sectors does not equal the total packaged foods because of double counting.

it should be kept in mind that official statistics about the confectionery sector in India are scarce and there is a large ‘gray’ sector that is unaccounted for by official sources. 20. Some of the largest multinational companies active in the confectionery sector. entertainment information. mints and chewing gums.7 Even considering the urban market alone. Also. consumer promotions and trade promotions make this one of the most hyperactive categories in the Indian market.1 THE CONFECTIONERY MARKET IN INDIA TODAY General background The chocolate and confectionery market in India has undergone major changes and growth since the opening up of the economy and liberalization of the investment regime in 1991.000 million. It also has exclusive professional alliances with international leaders in a number of specialist areas of market research and is part of the VNU. considered to have modest penetration have reached 56% of the Indian households. global mergers and acquisitions have 7 A note on data availability and accuracy We have made our best effort to provide as accurate and comprehensive data as possible. high decibel media activity. there are some inconsistencies. cookies. Compared to the conventional fast moving consumer goods (FMCG). still has considerable potential to grow before it reaches saturation point. 16 . have already invested in India and others keep entering the market (e. Lotte in 2004). which has been showing healthy growth over the last years. like Cadbury. India became an attractive place for foreign investment and several large multinational companies entered the market for confectionery products. For example. This resulted in its steady growth and gradual transformation from a commodity market to a branded products market dominated by multinational companies. it is valued at around Rs. Regular product launches. toffees and other sugar-based candies. The Indian confectionery market is segmented into sugar-boiled confectionery. In result. Sugar-boiled confectionery. media information and precision marketing. the confectionery segment in India offers significantly higher potential for growth. over the past five years toilet soaps and detergents reached over 90% of the Indian households. For comparison. Nestle and Perfetti. Clearly the confectionery sector.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today SECTION 3: 3.g. Indeed. as have traditional FMCG products such as soaps and detergents. 15%. according to some key industry players we spoke to. the confectionery market in India is witnessing tremendous activity. while according to ORGMARG estimates. ORG-MARG is a Mumbai based market research company specializing in consumer behavior. is the largest of the segments and. consisting of hard-boiled candy. However. chocolates. The Netherlands – which belongs to AC Nielsen network of market research companies. the category reaches just 22% of the urban consumers. chocolate penetration in 2000 was 5% and of sugar boiled confectionery. Most of the numbers we quote in this report are based on estimates of some of the main industry players.

sweetmeats directly compete for consumer stomach share. and Lotte with Parry’s). Brand consciousness is growing in this category as well.1 The confectionery sector Market size Despite its vast population.2 3. which makes it difficult for marketers to raise prices. While not directly included in the scope of this study. 3. a very important factor in the price sensitive Indian market. These are numerous small scale/backyard operators who are not registered and do not pay excise duties to the government. Thus. 17 . In result of these active developments and the positive socio-economic changes in India.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today resulted in consolidation of some of the major players in this segment in India (e. It is valued at close to US $450 million.000MT. and is estimated to be 138. there are clear signs for a growing market segment for higher value products. sweetmeats are generally cheaper. as illustrated in Figure 9. At the same time they maintain very low operational costs. both per capita consumption and availability of higher quality products are expected to grow in the coming future. With a population about five times larger than the US. Perfetti with Van Melle. This price sensitivity plays to the advantage of a large unorganized production sector in India. increasing number of consumers are willing to pay a premium for quality. At the same time. the volume size of its confectionery market is more than 20 times smaller. In addition. Last but not least.g. and frequently prefer and seek the traditional sweetmeats they are used to instead of a chocolate or other confectionery product. However. India’s confectionery market is very price-sensitive. With the growth of the middle class. India’s confectionery market is still very small. any review of the Indian confectionery sector should take into account the traditional sweetmeat sector. which has given a boost to product and packaging innovation.2. These factors allow them to sell at very low prices and to achieve significantly higher margins than the organized sector. A brief description of the sweetmeat market is given in Appendix 1. Some large Indian companies have also entered the confectionery market by leveraging their overall brand equity and distribution infrastructure for their existing product lines. Joyco with Wrigley. Indians have strongly ingrained traditions and tastes.

26. gums grow at the fastest rate (8. Indeed.000MT Candies & Toffees Chocolates Breath Fresheners Bubble Gum Chewing Gum Other Categories 68.000 MT 22.000 MT 14.000 MT in India and 3. close to US$26 billion worth of confectionery products were sold in the US. This trend is partly attributed to the economic slow down that India experienced in 2000-2002 and resulting decline in consumer spending.000 MT 3. 8 The average exchange rate for 2003 was Rs. There is a clear trend of faster sales growth in value terms. and all agree that there is still large potential for further growth of the confectionery sector in India. While growth rates in general look rather healthy. In volume terms.350 MT 23. indicating that consumers are increasingly ready to pay a premium for higher value products. where penetration is even lower than the average for the country. respectively. over the 1998-2003 period overall sales have grown more than 55% in value terms and 46% in volume terms. retail sales have shown healthy growth over the last several years.150 MT Other 17% Chewing gum 2% Bubble gum 10% Breath fresheners 5% Chocolates 16% Candies & toffees 50% • • • • • • Source: Industry experts and leading manufacturers estimates.220 million).3 million MT in the US. Promar’s trade interviews As seen from Figures 10 and 11 below. The chocolate segment is the fastest growing in value terms (9. 46.5% and 8%.8% each).66 for US$1. At the same time. to adults as well. Confectionery products are impulse purchases which would be among the first to be cut out.5%). 18 .500 MT 7. many individual players have experienced slower growth in their sales over the last few years. Most of the large multinationals active in India are also actively marketing to rural India. to put these figures in some perspective.5%). at an average annual rate of 9.8% average annual growth rate) closely followed by the gum segment (9. 8 In volume terms these figures were 127. Companies are fighting this trend by broadening their consumer base from primarily children and teenagers. followed by chocolate and sugar confectionery (7. while retail sales for 2003 in India are estimated to have been US$562 million (Rs.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Figure 9: The Indian confectionery market – 138.

5 50.8 45. 20 15 10 5 0 1998 1999 2000 2001 2002 Gum 2003 Chocolate confectionery Sugar confectionery 140 120 100 80 60 40 20 0 1998 1999 2000 2001 2002 Gum 2003 Chocolate confectionery Sugar confectionery b) Volume Source: Euromonitor Figure 11: 1998 -2003 confectionery sales growth a) Average annual growth rate 12 10 Percentage Percentage 8 6 4 2 0 Value Chocolate confectionery Sugar confectionery Volume Gum Confectionery 9.2 Some specific market characteristics Some specific characteristics of the Indian confectionery market.8 8. in India.4 56.8 57. retail outlets like paan shops and kirana outlets account for the bulk of the sales and organized trade still has only an insignificant share in overall confectionery sales.5 7.2 46.2 Source: Euromonitor 3.9 70 60 50 40 30 20 10 0 Value Chocolate confectionery Sugar confectionery Volume Gum Confectionery 59.1 9.8 7. While the trade and distribution in western countries is mostly organized.5 9. compared to the developed western markets are: • • India is primarily a mono-pack market while the market worldwide is a multi-pack market.2.3 b) Total growth 54. Functional products and sugar free confectionery dominate the worldwide market while this trend is yet to pick up in India.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Figure 10: Retail sales of confectionery products a) Value 30 25 Thousand MT Billion Rs.4 7. • 19 .8 9.8 45.

The Re 1 price-point is not very popular. Consuming products such as mint and medicated confectionery conveys a sophisticated image. domestic players are increasingly finding a prominent position in the market. There is strong growth potential for chocolate. candies. milk products. which appeals to young people. Lotte India Corporation Ltd is primarily a manufacturer and marketer of sugar boiled confectionery. cocoa & milk based toffees.3 Manufacturers and key players The organized confectionery segment in India segment is dominated by the multinational companies.but there are some products in the rural markets that are available at 25 paise. tea. confectionery and malted food products. instant foods and culinary products. This is due to the low penetration of chocolate confectionery in rural areas as well as the general low consumption of such products among adults.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today • • • Sugar confectionery will remain the largest confectionery type. Gum confectionery will be the fastest growing category. The key players in the confectionery sector in India today are: • • Cadbury India Ltd is the largest manufacturer of chocolate. malted beverages. chocolates and confectionery. Nutrine Confectionery Co Pvt Ltd is a manufacture and marketer of sugar boiled confectionery. cocoa and milk based toffees. éclairs and fruit bars.2. however. pricing strategies play a significant role in shaping purchasing decisions. albeit from a smaller retail base. • • • • 3. Nestle India Ltd is a manufacturer and marketer of coffee. the local population is increasingly turning to branded confectionery products such as chewing gum and mints. sales of chocolate confectionery are expected to continue to grow by more than 8% per year in value terms. Instead of chewing on paan (betel nut leaf) to freshen one’s breath or using spices such as fennel to aid digestion. 50 paise is the most popular price-point and around 85% of confectionery sales occur at this price point . instant baby cereals & foods. Manufacturers are increasingly looking to create a shift from manufacturing lowmargin products like toffees and boiled sweets to higher-margin products such as gum and chocolates confectionery. • • 20 . candies and mints. As younger children are traditionally the key consumer group for confectionery.

Gujarat Cooperative Milk Marketing Federation is India's largest food products marketing organization and manufacturer of milk and milk products. candies. They are also the largest contract manufacturer for various Indian and overseas confectionery companies. a division of ITC Ltd made a foray in the confectionery market in year 2002. 3. India also has a large unorganized manufacturing sector. 21 . Lotus Chocolates Co. bubble gum. mints and toffees. Ltd is another processor of cocoa and cocoa based industrial products with a small presence in the branded chocolate sector. sugar boiled confectionery. has a presence in the confectionery market since 2001. ice creams. Perfetti Van Melle India Ltd is a manufacturer and marketer of sugar based confectionery and is a leader in the candy and gum segments of the confectionery market. and cocoa and milk based toffees.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today • Candico India Ltd is a manufacturer and marketer of sugar boiled confectionery. Also in September 2004. ITC Foods. although it will gradually begin to decline. Korea acquired a 60. India’s leading FMGC company. We believe that this figure is exaggerated. chocolate and confectionery. the unorganized sector can account for up to 50% of the market. Parry’s Confectionery Ltd officially became Lotte India Corporation Ltd. The CAMPCO Ltd is a leading processor of cocoa and cocoa based industrial products and has a small presence in the branded chocolate sector. Hindustan Lever Ltd. gums.2. • • • • • • • • In addition. and ready to eat products. of small producers offering very low priced products. • January 2004 .4 Market snapshots for 2004 The confectionery industry in India has experienced some hectic activity in the year 2004.Lotte Confectionery Co Ltd. There are no statistics about the size of the unorganized sector. Parle Products Pvt Ltd is a manufacturer and marketer of cookies. chewing gum and candy (Joyco brands). but the main point is that the unorganized sector still plays a very important role in India. but according to some industry sources.39% stake of Parry’s Confectionery Ltd from the Chennai-based Murugappa Group. Wrigley India Pvt Ltd is a manufacturer and marketer of chewing gum (Wrigley brands) and sugar based confectionery.

Pvt Ltd announced an investment of Rs.Perfetti van Melle India Pvt Ltd announced an additional investment of Rs. November 2004 – The Rs. formerly Warner Lambert India Pvt Ltd brands.Wm Wrigley Jr Co’s global acquisition of Spanish major Joyco Group saw a significant restructuring of operations involving the two Indian companies. April 2004 .Nutrine Confectionery Co. October 2004 . candy and other confectionery in India by setting up a new plant by 2005. a Mumbai based candy chain announced their plans to open 20 outlets across India by 2005. September 2004 . Mentos and Fruittella. This was consequent to the acquisition of the global non-chocolate confectionery business of Pfizer Inc. the Wrigley-Joyco combination in India announced that they will operate as a single entity. 750m joint venture with Lotte Company Japan. Snickers and Bounty in India through imports. In May 2004. USA. 7500m Delhi based DS Group announced a Rs.Candico India Ltd became the 1st Indian multinational confectionery company to setup a manufacturing unit in Tanzania with an investment of US$1million. • • • • • • • 22 . 100m to install a new candy process line for manufacturing deposit candies. announced that it is consolidating the presence of its flagship chocolate brands Mars. 2000m in India to increase its manufacturing capacity for marketing and brand building. The Chennai unit will increase production of the former Van Melle brands . Joyco India Pvt Limited and Wrigley India Private Limited.Cadbury India Ltd announced its foray into the confectionery sector with the re-launch of Adam’s Halls and Clorets lozenges. Wrigley India Pvt Ltd. The candy market in India set to experience significant action and innovation. June 2004 .Effem India Pvt Ltd. to manufacture chewing gum. a wholly owned subsidiary of Mars Inc. December 2004 . which it had acquired after the global acquisition of Van Melle in 2002. UK.. Imports commenced in August 2004. chocolate. Cadbury India Ltd announced that it will strengthen its position in the confectionery sector with the launch of gums in 2005.Marbels.. Parfetti also announced the upgrading of the Van Melle unit.. Twix.Sweet World.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today • January 2004 . and will consolidate and market brands of both companies in India. October 2004 . USA by Cadbury Schweppes plc.. in 2002.

5 5. has by far the largest market share in the confectionery sector.4 5.7 4. Ltd.4 0.8 7.2 7.2 0. From a bulk market for confectionery products. India is quickly transforming into a market for branded products.1 0.6 14. are brand aware and to a great extent their perceptions about the quality and value of any given product is based on the image of the brand rather than on the country of origin or other factors. The following table specifies the sales market shares of the leading companies in India for 2001 and 2002.5 Market shares and brands Cadbury India. 23 . the company was renamed to Lotte India Corporation Ltd.6 4.1 1.8 100 2002 29.9 0.8 4.4 0.7 4.6 2.1 0. all leading companies in the sector are focused on developing and promoting their main brands 9 After being purchased by Lotte Confectionery Co Ltd. its leading position will remain unthreatened for the coming years.1 0.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today 3. Today’s consumers. Confectionery companies shares Company Cadbury India Ltd Perfetti Van Melle India Ltd Nestlé India Ltd Nutrine Confectionery Co Ltd Joyco India Ltd Parle Products Ltd Parry's Confectionery Ltd Hindustan Lever Ltd Gujarat Co-op Milk Marketing Federation Ltd Warner-Lambert India Pvt Ltd Candico India Ltd Wrigley India Pte Ltd Agro Tech Foods Ltd Ferrero SpA Private Label Others Total Source: Euromonitor 9 2001 30 14. In result.4 1.5 1.2 9.6 100 (% retail value) Ravalgaon Sugar Farms Ltd More detailed profiles of the main players are given in Appendix 2.2 0. Korea in 2004.2.4 10. Although other players are catching up.6 14.2 1.5 2.6 14.1 1.7 1. particularly from the middle and upper classes.7 1.

Cadbury’s Dairy Milk brand is the most popular in India.8% 1.1% 0.3% 1% 0. Cadbury India’s brands have by far a leading position in terms of sales.7% 0.5% 0.3% 2002 12.3% 1.1% 4% 3.2% 29.6% 0.3% 0.5% 0.9% 1.4% 1% 0.4% 0.8% 4% 1.2% 4.4% 0. Confectionery brands shares (percentage of retail value) Company Cadbury India Ltd Brand Cadbury's Dairy Milk Cadbury's Dairy Milk Éclairs Cadbury's 5 Star Cadbury's Perk Cadbury's Celebrations Cadbury's Gems Googly Cadbury's Mr Pops Trebor Warner-Lambert India Pvt Ltd 10 2001 12.3% 0. The following table shows the leading chocolate and confectionery brands in India.3% 0.4% 0. far ahead of the second best seller.6% 1.5% 4.3% 1% 0.1% 1% 0.4% 4.1% 14.5% 0.9% 3.3% 4% 2.5% 2% 1. a result of the purchase of Pfizer’s confectionery business in 2002.4% 0. 24 .7% 0.2% 29.7% 0.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today through creative marketing and advertising strategies. it has four brands among the top 10 selling brands. with sales share (in value terms) of over 12%.2% 0.7% 0.7% 4% 1.3% 1% 0. Perfetti’s Alpenliebe.9% 1.3% Halls Clorets Total for Cadbury’s brands Perfetti Van Melle India Ltd Alpenliebe Big Babol Center Cofitos Chlor-Mint Mentos Fruit-tella Marbels Total for Perfetti’s brands Nestlé India Ltd Kit Kat Nestlé Classic Polo Milkybar Munch Nestlé Bar One Soothers 10 Warner Lambert’s brands are currently part of Cadbury’s portfolio.3% 4% 2.3% 4% 3.1% 14.

3% 3.6% 22.1% 2% 1% 0. 12 In 2004. India. of which Joyco India was a fully owned subsidiary.3% 6% 2. 25 .7% 0.2% 3.4% of Parry’s to Lotte Confectionery Co Ltd.5% 0.2% 0.4% 6.8% 1.7% 1.7% 0.4% 0.2% 0. Korea and the company was renamed to Lotte.8% 1.5% 1.1% 9.1% 9.4% 6.1% 4.5% 0. owner of Parry’s Confectionery Ltd.2% 0. Ltd.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Company After Eight Frutips Total for Nestlé’s brands Nutrine Confectionery Co Ltd Maha Lacto Nutrine Koka Naka Brand 2001 0.1% 0.6% 0..6% 22.1% 4. Spain.2% 0.5% 3.4% 3. sold 60.8% 0.1% 0.5% 1.2% 0.3% 2.5% 0.9% 1. Wrigley acquired the confectionery business of Joyco Group.7% 1.4% 100% Naturo Fruit Bar Total for Nurine’s brands Joyco India Ltd Boomer Pim Pom Bonkers Trex Wrigley India Pte Ltd Total for Wrigley/Joyco’s brands Parle Products Ltd 11 Doublemint Kismi Parle Mango Bite Parle Poppins Parle Orange Candy Parle Mint Extra Strong Total Parle’s brands Parry's Confectionery Ltd Total for Parry’s (Lotte) brands Hindustan Lever Ltd Gujarat Co-op Milk Marketing Max Amul Private Label Others Total Source: Euromonitor 12 Coffy Bite Lacto King 11 In 2004 Wm.2% 0.3% 2. the Muragappa Group.8% 0.8% 1.3% 6% 2.6% 3% 2% 1% 0.4% 3.6% 100% 2002 0.6% 0. Lotte Korea is expected to acquire the remaining shares in the near future.

THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today 3. This however.00 10. Milk chocolate is strongly preferred to dark and bitterer chocolates. accounting for about half of all chocolate sales of about Rs. Countlines is the second largest segment.00 1998 1999 2000 2001 2002 2003 Tablets Bagged selflines/softlines Other chocolate confectionery Countlines Boxed assortments 1998 1999 2000 2001 2002 2003 Tablets Bagged selflines/softlines Other chocolate confectionery Countlines Boxed assortments Source: Euromonitor 26 . As seen from Figure 13 below. it should be noted that despite the healthy growth potential. is matched by the growth rate for the various boxed assortments which are becoming increasingly popular to be given as gifts.00 6.3 3.00 b) Volume 30 25 Thousand MT 20 15 10 5 0 Billion Rs.00 4. Tablets also have shown strongest average annual growth rate (Figure 14).00 0. Figure 12: Tablet chocolate sales by type Filled 13% Plain white 4% Plain dark 8% Plain milk 75% Source: Euromonitor Figure 13: Chocolate confectionery retail sales a) Value 12.3. chocolate tablets dominate the market. 10 billion (27 thousand MT) in India. It is also the fastest growing confectionery segment in value terms with average annual growth close to 10% (see Figures 10 and 11).00 2. this is still a very small market with sales concentrated primarily in the better-off urban areas. while dark or white chocolates account for about 8% and 4% respectively. with the remainder being various filled chocolates (Figure 12).1 Market segments Chocolate confectionery Although chocolate confectionery represents less than 20% of the total confectionery market in India in volume terms. 8. However. It is estimated that about 75% of the volume of tablet chocolate sold is plain milk. followed by boxed assortments. its share in value terms is about 40%.

the respondents to our trade survey reported that some imported brands have started gaining popularity in India.0 2.0% Nestlé India Ltd 21.1 10. In result. Cadbury’s leading position seems to be unthreatened for the foreseeable future.0 Value Tablets Boxed assortments Countlines Chocolate confectionery Volume Bagged selflines/softlines Tablets Boxed assortments 10. Ltd. and other countries. Figure 15: Companies’ retail value share in the chocolate confectionery sector a) 2001 Ferrero SpA 0.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Figure 14: 1998 – 2003 chocolate confectionery sales growth a) Average annual growth rate 12. but in recent years Nestle has toughened the competition by launching new products and targeting the mass market with lower priced products. Nestle is gradually earning some additional market share (from 20% in 2001 to over 21% in 2002). while in the mass market there is a broader spectrum of brands manufactured in Malaysia.0 10. (GCMMF) is a distant number three. Despite the gains.2% Cadbury India Ltd 64.3% GCMMF 3. it has also started a major effort to broaden its reach by launching new products and targeting the children and teens consumer segment.0 6. Cadbury is a very strong number one.0 0.7 b) Total growth 70 60 Percentage 62 58 45 62 60 54 46 45 32 46 9.7 9.4% b) 2002 Others 9.7 5. In the upscale niche market segment these are mostly Swiss and Belgium chocolates.3% Cadbury India Ltd 66.5 9.8 50 40 30 20 10 0 Value Countlines Chocolate confectionery Volume Bagged selflines/softlines Source: Euromonitor As seen in Figure 15. However. Finally.1 7. Thailand. it has found it difficult to leverage its leading position in the dairy sector into the confectionery market.4% Ferrero SpA 0.0 Percentage 8.0 7.9 7.8 7. Argentina.9% Source: Euromonitor 27 . The Gujarat Milk Cooperative Marketing Federation.3% GCMMF 4.4% Nestlé India Ltd 20.0 4. Cadbury and Nestle completely dominate the chocolate market segment.8% Others 9.

Accounting for about half of the total confectionery market. Cadbury’s Celebrations. According to a major manufacturer of bulk chocolate. Diwali. there are numerous small chocolates manufacturers operating in India taking advantage of the premium end segment. Christmas. Cadbury’s Gems. As seen from Figure 16. the bulk chocolate market in India is about 8.2 Sugar confectionery This is the largest confectionery sector in India both in value and volume terms.000 housewives in India who are making chocolates professionally. closely followed by Cadbury’s 5 Star.000 MT. and ice cream industries. Many of these home-based operations market and sell chocolates online and frequently they claim to be using Belgian and Swiss ingredients. New Year).000 – 10. mints sales have been growing the fastest over the last 5 years (Figure 17).g. Stick. Trade estimates suggest that there are about 15. In addition to the major companies. Nestle Bar One. Lollipops are a new product in the Indian market which first registered noticeable presence in the market in 2002. A few. and a major part of this is utilized by the homemade chocolate segment. in addition to the bakery. they have also registered growth of over 10%. Nestlé’s Kit Kat is second with just over 10% share. Forecasts show that lollipops will continue to strengthen their market position. In terms of growth however. the same as mints. this is a relatively new trend that was not seen five years ago. After Eight (Nestle). the sugar confectionery segment is also showing healthy growth. 28 . Munch (Nestle). Rakhi. 3.3. According to the respondents to our survey. followed by sugar boiled sweets and mints. and Cadbury’s Chocki. Nestle Choco. many housewives have taken the business of chocolate making seriously and operate during the festival season (for e. the toffees/caramels/nougats segment is by far the largest. worth mentioning are: • • • Mumbai based Fantasie Chocolates New Delhi and Bangalore based Choco Swiss New Delhi based Belgique Chocolates Also. not just as a hobby or for home consumption. primarily due to the low-price strategies and discounts offered by the main players. Ferrero Rocher (Ferrero SpA). and Cadbury’s Perk. Other brands with noticeable market presence are Nestle Classic.000 – 20.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Cadbury’s Dairy Milk is the leading chocolate brand with about 32% share of the value of retail sales. Amul (of GCMMF). but for the 2002-03 period.

caramels and nougat Boiled sweets Volume Medicated confectionery Pastilles. However.00 12.9 41. With customers also becoming increasingly quality conscious.6 54. caramels and nougat Mints Lollipops Boiled sweets Pastilles.00 90 80 70 60 50 40 30 20 10 0 1998 1999 2000 2001 2002 2003 Toffees.000 brands and numerous manufacturers. the recent reduction of the excise tariff for sugar confectionery to 8% has further reduced the competitive disadvantage which the unorganized sector had.8 8.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Figure 16: Sugar confectionery retail sales a) Value 14.8 39. jellies and chews Sugar confectionery 11.4 59.8 6.00 0. the share of the unorganized sector in this category has been gradually shrinking. Over 70% of the products sold in this segment are in the 50 paise category. caramels and nougat Boiled sweets Volume Medicated confectionery Pastilles. jellies and chews Medicated confectionery b) Volume Source: Euromonitor Figure 17: Sugar confectionary sales 1998 – 2003 growth a) Average annual growth 14 12 Percentage Percentage 10 8 6 4 2 0 Value Mints Toffees. In addition.2 25 45.4 28.8 b) Total growth 80 70 60 50 40 30 20 10 0 72.2 56.2 5.1 4.13 13 For more information on prices .00 4. and tariffs.5 Value Mints Toffees.5 9.7 9. taxes. gums.00 8. nougat Mints Medicated confectionery Boiled sweets Pastilles. gums.00 1998 1999 2000 2001 2002 2003 Toffees. caramels. gums.6 7. 29 . The unorganized sector has been traditionally operating through huge trade margins and relying on trade push.3 8 6. there are clear trends in favor of the organized sector due to better products.00 6.7 47. jellies. chews Lollipops Thousand MT Billion Rs.3 46.1 9. see Section 5.00 2. gums.1 7. improved merchandising and brand-building activities.3 38. 10. jellies and chews Sugar confectionery Source: Euromonitor The sugar confectionery segment is highly fragmented with over 20 companies in the organized sector and a proliferation of unorganized players which according to industry sources account for nearly 5.

leading to stronger competition among the main players. followed by Parle. The top five account for over 60% of the retail sales of sugar confectionery in India.9% 15.3.2% 4.9% 100% * Purchased by Lotte in 2004 and renamed to Lotte India No single brand commands more than 10% share. Share of sugar confectionery retail sales Company 2001 2002 1. Cadbury India Ltd 4.3 Chewing gum This a smaller but fast growing segment of the confectionery market in India. Agro Tech Foods Ltd 13.1% 3. company and brand leadership is less dominant. it is nowhere near 30 . As seen from Figure 18 below. Others Total Source: Euromonitor 16.8% 9.4% 1. Candico India Ltd 14.8% 3.4% 2. Nutrine Confectionery Co Ltd 3. The table below lists the share of retail sales of the main players. Hindustan Lever Ltd 10. Joyco India Ltd 9. Parle Products Ltd 5.2% 4% 3. Chewing gums like mints. Warner-Lambert India Pvt Ltd 11. Parry's Confectionery Ltd* 6.2% 100% 17. Nestlé India Ltd 8.2% 4.4% 2. 3.1% 15% 9. it has been making a strong push to develop its brands (Clorets. but it is closely challenged by Nutrine and Cadbury.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Unlike the chocolate segment.3% 0.8% 9. and Adam’s Halls).4% 9.2% 4.5% 19.4% 9. for example. Since Cadbury acquired Warner Lambert’s confectionery business. are gaining momentum among young adults as breath fresheners. followed by a myriad of other brands. Private Label 12. Lotte (Parry’s Confectionery). Although chewing gums are also showing faster growth rate than bubble gum (see Figure 19). Perfetti Van Melle is the leader in terms of sales.4% 1. Perfetti Van Melle India Ltd 2.1% 9. Ravalgaon Sugar Farms Ltd 7.4% 20.3% 0. and several others.7% 3. the market is driven primarily by sales of bubble gum to children which accounts for over 75% of the total value of gum retail sales in India. The two largest ones are Alpenliebe of Perfetti Van Melle and Cadbury’s Dairy Milk Éclairs with 10% and 8% respectively.

the product has sold way under expectation. there are only few important players in the gum segment. launched in 2001.5 1 0. fighting tooth decay and plague. however. The only functional gum that is on the market is Perfetti’s Happydent White.5 50 40 30 20 10 0 49 Value Chewing gum Bubble gum Volume Gum Source: Euromonitor Unlike sugar or chocolate confectionery.5 9 8. Since the acquisition.5 0 1998 1999 2000 Chewing gum 2001 Bubble gum 2002 2003 20 18 16 14 12 10 8 6 4 2 0 1998 1999 2000 Chewing gum 2001 Bubble gum 2002 2003 b) Volume Source: Euromonitor Figure 19: Gum confectionary sales 1998 – 2003 growth a) Average annual growth 12 10 Percentage 8 6 4 2 0 Value Volume Chewing gum Bubble gum Gum 10. India. However. and Chennai. Joyco was number two in gum sales and Wrigley was number four. the two companies 31 . India is the leader followed by Wrigley. 2 1. Perfetti Van Melle. While bubble and chewing gum are growing quite fast.1 9. like New Delhi. Wrigley Jr. This is a mint flavored gum that fights tooth decay and has a whitening effect due to the baking soda it contains. Mumbai. Co.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today catching up with it in terms of sales and market share. gum disease) are virtually non-existent.6 b) Total growth 70 60 Percentage 66 55 57 54 50 9. and Candico. Until the acquisition of the Spanish Joyco Group by Wm. Figure 18: Gum confectionery retail sales a) Value 3.g.4 8.5 3 Thousand MT 2. India. functional gums that address specific health issues (e.5 Billion Rs. gaining some recognition only in several key metropolitan cities.

Nevertheless. there are no statistics or estimates available to quantify the market segment. in July 2003. Immediately after this notification. Doublemint (Wrigley). The ingredient was allowed in categories such as chewing gum and bubble gum. It is estimated that the sugarcane farmers and their families number over 35 million and represent about 7% of the rural population. no such products were imported as well. the category is currently very small. Other popular brands are Center (Perfetti).3. and Chlor-Mint (Perfetti). As a result there was no sugar-free confectionery available in the market. However. While some sugar-free beverage and confectionery products could be seen on market. Several of our respondents in the retail sector reported that they carry some sugar-free products. these had been imported illegally. Trex (Joyco). Perfetti’s Big Babol and Joyco’s Boomer are the two leading brands in terms of sales with 32% and 30% share respectively. Loco Poco (Candico). Candico has about 8%. bread and cakes. Up to that time. According to this notification.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today and their brands will be consolidated. The notification adds that all food products said to contain artificial sweeteners will need to declare “contains artificial sweeteners” on the package. cookies. the Ministry of Health with consultation with the Central Committee of Food Standards amended the Prevention of Food Adulteration (PFA) rules of 1995 and allowed production of sugar-free confectionery. the only artificial sweeteners that were allowed to be manufactured in the country were table top sweeteners for use by diabetics. 32 . India has a very important sugar industry providing employment for a large number of people. and the joint share of Wrigley and Joyco is about 35%. 3. Perfetti holds a slightly higher share at 45%. confectionery products can contain up to 1% food grade titanium dioxide and limited quantities of aspartame. This ruling was to a great extent the result of the pressure the strong sugar lobby was putting on the government.4 Sugar-free confectionery Until July 2003 the use of artificial sweeteners was not allowed in India. The couple of respondents who were carrying sugarfree products in their stores believed that the category should grow. Since the Indian food law did not allow the use of artificial sweeteners in confectionery products. Currently. however. since these products have been allowed in India for such a short period of time. One thing is for sure. Perfetti Ven Melle launched Happydent Protex sugar-free chewing gum followed by Wrigley's who launched Orbit.

650 835 430 308 4. are less than 1% by volume and value of US confectionery imports in 2003 alone.960 2. the Indian market was virtually closed to imports due to extremely high tariffs and other additional taxes on imported goods. Despite these efforts. Imports of bulk chocolate and chewing gum remain very small at roughly US $500.180620 540 339 Retail chocolate – Total 5.300 1. totaling US $3.317 Source: India Directorate General of Foreign Trade 2002-03 $ 000 MT 260 78 1. respectively.170490 3.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today 3.620 1. India’s financial year runs from April 1 to May 31 the following year.1 Confectionery imports General trade information Until recently.180632 70 185 Retail chocolate . 14 Although confectionery imports increased by more than 40% in value and 20% in volume in 2003-04. import tariffs for many goods.180690 5.338 Bulk chocolate .450 1. and in combination with relatively low demand for confectionery products. As a result.180631 30 3 Retail chocolate . valued at roughly US $7 million.670 1.900 3.530 60 10 110 87 4.375 Total 9. remain high.000. Put into context. Confectionery imports into India 2003-04 $ 000 MT Chewing gum – 170410 390 77 Sugar confectionery . In 2003/2004 imports of retail chocolate totaled close to US $5.000 and US $400.4 3. the first full year without prohibitive quantitative import restrictions.563 Retail chocolate . As seen in Figure 20 below. in 2002-03. According to official statistics. retail chocolates and sugar confectionery account for the greatest share of total confectionery imported into India.700 MT of confectionery. Imports of sugar confectionery fell close behind.433 6. but registered a growth rate of 100% from the previous year.3 million.7 million. In 2001. India imported slightly more than 2. India’s total imports for 2002-03 and 200304. confectionery imports into India remain very small. the Government of India took steps to ease many of these restrictions and imports have since started to slowly infiltrate the Indian market. India’s confectionery imports still totaled just over 3. 33 .570 1.751 Growth Value Volume 50% -1% 100% 60% 26% 10% 23% 2% -50% -70% -36% 113% 25% -4% 42% 21% 14 The import data throughout this section is per financial year.000 MT and valued at less than US $10 million. including confectionery.4. combined.

34 . they remain very small. in the last two years. The growing importance of the UAE and the port of Dubai as center for export and re-export of confectionery products was confirmed by our suppliers. the two countries accounted for more than 20% in value and more than 30% in volume of the total confectionery import market in India. However.9 million Source: India Directorate General of Foreign Trade Base: 3. US confectionery exports to India experienced significant growth in 2002-03 and more than doubled in value and increased roughly 80% in volume. Nevertheless. while imports from the third largest supplier. the UAE. many of who indicated this as a preferred route. While confectionery products imported through the gray market pose a threat to confectionery goods imported legally. Malaysia and Singapore have been the leading suppliers of confectionery to India in terms of both value and volume. smuggled goods.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Figure 20: 2003-04 share of confectionery imports by type (volume & value) Chewing gum 4% Chewing gum 2% Sugar confectionery 33% Retail chocolate 58% Retail chocolate 48% Sugar confectionery 40% Bulk chocolate 5% Bulk chocolate 10% Base: US $9.2 Key suppliers. However. The US is a relatively small supplier of confectionery to India and accounted for only 4% in value and 3% in volume of India’s confectionery imports in 2003-04. have grown almost 60% in volume terms and almost 40% in value terms.317 MT It is important to note that an estimated 40-50% of India’s confectionery imports are thought to be “gray market imports” – those goods that have been: under invoiced in order to have fewer duties paid. parallel imports. As a result. they also affect the value of confectionery actually imported into India. albeit from a tiny base. imports from Singapore have shown decline. in the last year. particularly in volume term. In 200304.4. 3. and goods brought into India by people traveling from abroad. actual imports are probably somewhat larger that shown by India’s official import statistics. Other leading suppliers that experienced significant growth in exports to India in 2003-04 included Australia. types and brands of imported confectionery As seen from the table below and Figure 21. Brazil.

increasing more than 500% in value and more than twice in volume.900 3.317 MT 35 .751 Growth Value Volume 7% 2% -2% -23 57% 37% 129% 120% -17% -38% 54% 110% 42% 19% 113% 158% 44% -13% 529% 155% 37% 4% 153% 83% 52% 94% 42% 21% Figure 21: 2003-04 leading foreign suppliers (volume & value) Malaysia 10% Singapore 10% Malaysia 10% Singapore 10% Others 54% UAE 8% Others 54% UAE 8% Australia 8% Netherlands 6% Australia 8% Netherlands 6% US 4% US 4% Base: US $9.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Spain. and the UK. Confectionery imports by supplier 2003-04 $ 000 MT Malaysia 1.9 million Source: India Directorate General of Foreign Trade Base: 3.550 398 6.317 Source: India Directorate General of Foreign Trade 2002-03 $ 000 MT 950 645 1.030 517 510 166 350 148 760 315 350 30 360 74 240 43 340 233 70 31 300 105 150 46 1.360 772 Total 9.960 2. Confectionery exports from Spain registered the largest growth.020 661 Singapore 1.010 399 United Arab Emirates 800 227 Australia 800 326 Netherlands 630 196 Brazil 540 63 Switzerland 510 88 UK 510 111 Thailand 490 202 Spain 440 79 Korea 410 109 US 380 84 Others 2.

exports from these countries dropped more than 15% and 22%.000 to US $340. In 2003-04. On the other hand. exports from several other countries. 36 . grew significantly during the same period and their combined market share increased from 9 to more than 20%. Other suppliers include Indonesia. The Netherlands is the second largest supplier of retail chocolate and exported roughly 175 MT at a value of close to US $600. in value and more than 30% and 40% in volume between 2002-03 and 2003-04.7 million Source: India Directorate General of Foreign Trade Base: US $540. respectively. while US chocolate exports increased from US $110. Switzerland. the UK.000. with some imports originating from Singapore.000 in 2002-03 to US $310. Lebanese chocolate exports increased substantially. valued at US $850. rising from just US $20.000. Although Singapore and the Netherlands account for 25% of India’s imported confectionery market.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Retail and bulk chocolate India’s bulk chocolate imports are very small and are dominated by Malaysia. UAE. Singapore is by far the leading supplier of retail chocolate to India and in 2003-04 it exported more than 300 MT of retail chocolate. Figure 22: 2003-04 leading suppliers market share of chocolate Retail chocolate Singapore 15% Others 33% Netherlands 10% Bulk chocolate Others 11% Singapore 17% US 6% Brazil 8% UAE 10% Malaysia Switzerland 9% 9% Malaysia 72% Base: US $5.000 in 2003-04. and the UK.000.000. Lebanon and France. Singapore exported a total of US $90.000 in bulk chocolate to India. Malaysia exported US $390.000 Retail chocolate accounts for the biggest share of confectionery imports into India and the second largest share of the total market for confectionery in India. though exports from these countries are negligible. including the US.

Spain. Although sugar confectionery exports from the US are very small. although imports remain a very small portion of the whole. Some of the most popular brands and country of origin include: • • • • • • • Droste – the Netherlands Nestle – Switzerland Toblerone – Switzerland Lindt – Switzerland Mars. Between 2002-03 and 2003-04 the value of sugar confectionery imports grew from close to US $1. Korea. Bounty and Snickers – Holland Gandour – Malaysia Vochelle – Malaysia • • • • • • • Tango – Malaysia Van Houten – Malaysia Ferro Rocher – Brazil and Italy Tiffany – UAE Solen – Turkey Quanta – UAE Beacon – South Africa Sugar confectionery Sugar confectionery accounts for the largest share of India’s confectionery market and. 37 .000 in 2002-03 to US $420.000 in 2003-04. and Argentina). the chocolate brands primarily found in India continue to be from the leading suppliers of retail chocolate. of the top ten suppliers of sugar confectionery to India (Australia. China. UAE. Other countries with notable growth in exports include Turkey. Figure 23: 2003-04 leading suppliers market share of sugar confectionery Australia 22% Others 37% Thailand 13% US 1% Turkey China 7% 7% Spain 13% Base: US $3. UAE and the US.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Despite this rapid growth.300 MT.3 million and the volume increased from more than 800 MT to more than 1. Turkey. only imports from Malaysia decreased and the rest increased by at least 40%. they are growing rapidly. In fact. Thailand. Thailand and Spain are also important sugar confectionery suppliers and exports from the latter increased from just US $30. they grew more than 250% in 2003-04.3 million Source: India Directorate General of Foreign Trade Australia is the leading supplier of sugar confectionery to India and more than doubled its exports between 2002-03 and 2003-04. with a few exceptions. Malaysia. UK. Twix. Argentina.7 million to US $3.

5 3.5. Australia is the Source: India Directorate General of Foreign Trade leading supplier in terms of volume and in 2003-04 exported more than 20 MT valued at US $60. the actual volume Base: US $390. with exports of US China $100. 38 .000 to US $390. it is estimated to be just over 300g (0. In result. annual per capita consumption is also very low.000.7lb) for chocolate and around 600g (1. Figure 24: 2003-04 leading suppliers market share of chewing gum Others 10% Indonesia 8% UAE 8% Japan 26% Australia In terms of value. China and Korea are also important suppliers of chewing gum to India with 2003-04 exports totaling US $60.1 Consumption General information As already discussed in Section 3. Although the value of 15% exports from Japan increased by close to 200% from the year before. per capita consumption of confectionery products in the US is around 25lb. the value of imports increased roughly 20% from US $260. however.000.1 confectionery products have very low penetration in the Indian market. The volume of chewing gum imports remained relatively unchanged at close to 80 MT in 2002-03 and 2003-04.000. Japan is the leading supplier Korea 15% 18% of chewing gum to India.000 of exports that year decreased by more than 50% and totaled just 8 MT.000 in 2003-04.3lb) for sugar confectionery.000 and US $70. For comparison. respectively.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Brands of sugar confectionery in India originate from a number of different countries and some of the most prevalent brands are: • • • • Brach’s – US Magic Pop/Dust – Korea Kopiko Coffee Candy – Malaysia Popo Cup Jelly – Malaysia • • • • Hartbeat Love Candy – Thailand Arcor – Argentina Candeli – Argentina Tiffany – UAE Chewing gum Chewing gum imports and the overall market for chewing gum in India are very small. 3.

The optimism is further fueled from the forecast for rapidly increasing incomes.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today It is primarily the low penetration and consumption that heighten everybody’s expectations about the high potential for growth of this market. In result. This trend has given a boost to the boxed chocolates segment. Children usually purchase sweets with their pocket money. many confectionery products and particularly chocolates are considered luxury products even by the better-off consumers. westernization of India (particularly young adults in the urban areas) is seen as another factor positively impacting the growth potential for confectionery products and chocolate in particular. particularly in volume terms. In addition. This has several important consequences for the further development and growth of the Indian market: • With over 30% of the population younger than 15. and therefore appropriate as a gift. which is a result of its increasing popularity as a gift.15 Finally. It is seen as an indulgence product. India is a very young nation. Almost all confectionery purchases in India are believed to be impulse driven. On the negative side. not just an indulgence. and sugar confectionery and bubble gum in particular. The confectionery market will continue to grow by simply continuing to target this consumer segment which will remain the main potential for growing the market. Experts indicate that sugar confectionery and gum products consumption are driven almost entirely by impulse purchasing. further strengthening the “indulgence product” constraint to deepening market penetration and increasing consumption.2 a) Demographic and lifestyle considerations Age Children and teenagers are the main consumers of confectionery products. in their effort to increase consumption and product penetration. and over 50% younger than 25. Some of our respondents also indicated that they have observed increasing chocolate sales to kids and teenagers. increase in world prices of cocoa contributed to increased prices of chocolates. as already indicated. Thus price will remain a most important factor when targeting • 15 More information about the market for sweetmeats is given in Appendix 1. rather than with their parents’ money. 39 . On the other hand. 3. confectionery products compete with the traditional sweetmeats which continue to be very popular in India. marketers have started to promote some products as appropriate snacks.5. Thus even with the rising incomes and westernization. because of its increasing popularity as a gift for various occasions and during the festival season. The figure is lower for chocolates (about 70%). Chocolate has already shown larger growth than sugar confectionery. India is a very price sensitive market.

poor infrastructure. 40 . However. While rural sales have been growing over the last years. the potential for growth in urban areas also remains significant. 16 For example. rural areas Confectionery sales in India are driven mostly by the urban market segment. estimates also indicate that confectionery products have significantly higher penetration (about 22%) in the urban markets than the country average penetration. generally fall in the highest price brackets. there are increasing opportunities to sell higher-end niche products. in addition to the growth trend in the mass market segment. adults prefer chewing gum. Price. At the same time. Most of the potential growth in sales of higher end products will come from the adult population. b) Urban vs. which is more modernized and open to novelty and untraditional products. while unorganized manufactures and home made sweets thrive in the rural areas.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today Indian youngsters. about 70% of the population lives in rural villages. lack of exposure to new products and stronger traditionalism. particularly from Europe and the US. As imported products. concentrated mainly in the urban areas and large metropolitan areas. Indeed. marketing efforts are concentrated on promoting the lower priced mass market products and on offering smaller packs. Euromonitor estimates that the value share of retail sales in rural areas has grown from 20% in 1998 to 30% in 2003.16 The difference is that in urban India. Chocolate consumption is concentrated almost entirely in urban India. many of the main players in the Indian confectionery sector have started focusing on tapping the potential of rural India. This is particularly important for those who are looking for opportunities to export confectionery products to India. The organized sectors has its stronghold in the urban markets. where incomes and consumer awareness are generally higher. • While children are attracted mostly to bubble gum. Similarly. they hold potential among the more affluent consumer segments. are the main reasons for this. medicated or functional products target the adult (mostly the young adult) population. Estimates suggest that between 60% and 70% of the confectionery sales in India are concentrated in the more developed urban areas. As incomes in these areas are generally lower. Chocolate sales are still limited only to the few wealthier households.

it attracts young. 7. well30% educated professionals with good incomes who Source: Euromonitor are open to trying new products. more sophisticated adults. it is home of several booming North (Rs. which form the bulk of confectionery sales in India. because confectionery sales are (Rs. The north is home of the capital New Delhi and the up and coming states Uttar Pradesh and Rajasthan and marketers have been putting special efforts there. d) Westernization Regionality Westernization is an increasing trend in Indian lifestyles. its main city. 27% and it is the center of the thriving Indian IT South (Rs.8b) generally linked to higher income consumers. 17% 26% And. particularly in the large metropolitan areas. In this respect it is not the center for sales of mass confectionery products. and home of a larger concentration of professional. Bangalore. Although the Indian west shows slightly lower sales than the north and the south. South India is the India by region largest region for confectionery sales. is the most important center which alone accounts for almost half of the sales in the region. and Hyderabad. pre-packed branded products are not commonly popular. Mumbai. which is seen as trendy. like Chennai. This is believed to have contributed to the growth of chocolate consumption in the country.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today c) Figure 25: 2003 confectionery sales in As seen from Figure 25. These characteristics also make the south a favorite for new product market testing. As such.8b) industry. and in general the market offers larger variety of products than in other parts of the country. freshly made products. 7. 41 .1b) cities. and willing to spend for quality. The ability of chocolate companies and marketers to enter this market could provide unprecedented growth. 6. As a result. The city is the financial capital of India. sales have been growing at above average rates. Indeed although traditionally Indians have a culture of consuming and exchanging sweets as gifts. The consumption pattern and purchasing habits tend to favor local. It is usually the first place where new products are launched. In result. 4. but offers more opportunities for premium products and chocolate in particular. have registered significant growth in the region over the last couple of years.5b) West (Rs. It has mainly contributed to the boost chocolate has seen as a gift. This is East & Northeast not surprising. for example. products like power mints. the Indian south is better developed than many other areas.

in the rural areas. These can be summarized as follows: • The urban market is brand conscious. consumers associate it with the UK. Imported brands are presented much better than Indian ones. Imported products in general are considered to be of higher quality than the domestic ones. This trend is particularly noticeable in the urban areas and among middle and upper class consumers. and made in Europe. • • • • • 17 Although the Mars brands are usually associated with the US. Swiss and Belgium chocolates are considered the crème de la crème.5. importers and distributors. consumers are usually not aware.3 Brand and origin awareness and perceptions While domestically manufactured brands dominate the market and consumers have general awareness about them. where brand and country of origin really matter to consumers when making purchasing decisions. many of the large multinational companies have production faculties throughout the world and various distribution arrangements for different countries/regions.” The upscale niche market is focused on brand and image quality. Except for the top quality chocolates. Consumers are looking for known brands with good quality images. “in the metro areas consumers associate brand names with quality. Attractive packaging is very important for the brand image. manufacturers and marketers are putting increasing effort into detaching chocolate from its ‘kids’ image and to broaden its consumer base among adults. and retailers. We were consistently hearing similar comments from our respondents from all categories – manufacturers. Products from SE Asia and South America are more oriented to the mass market. foreign products and brands are becoming increasingly known. consumers associate higher prices with better quality. Thus frequently the global brand products may be manufactured at various places without consumers being aware or interested in the actual place of origin. It is in the upscale niche market segment.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today At the same time.17 Consumers as well as the trade generally have a good perception about the quality of US products. US brands are less known than European ones. while European and US products cater to the upscale market segments. Indeed. and generally not interested in where a product has been manufactured as long as they are familiar with the brand. the rural market is price conscious. As one respondent put it. 3. Tiffany is a popular brand with mass appeal mostly manufactured in the UAE. Mars and Hershey’s are the only US brand names with broader recognition in India. the products available in India are usually imported from. 42 . Indians associate quality with good packaging. For example. However.

0. are from the Rs. from the top end products. For imported products the price is generally structured as follows: Landed cost (FOB+freight+insurance) + Basic duty + Countervailing duty = Excise duty (production duty) + Special additional duty + Educational cess (2%) 43 .categories. Most major companies including Cadbury’s and Nestle are strongly pushing sales of their Rs. Asian and South American products are usually moderately priced. The most popular price range for confectionery products is the Rs. because it is not seen to affect any major true Indian player or manufacturer. etc. 0. the government is not really keen on reducing the duty. many experts see that the mass market will grow at faster rates than the niche segments.85. country of origin. 12/. 130.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today 3. From April 01.3%. 5/-. Parle. All involved in the distribution and manufacturing of chocolate products see this as a major constraint to the growth of the segment and believe that the excise duty for chocolates should be brought down similar to the duty for sugar confectionery. Some chewing gum and bubble gums are in Re. it is 16%.25 to Rs. 2/and Rs. 2005 the Government of India will implement value-added tax (VAT).categories. 1 price categories. 1/-. Rs. Lotte. while in some of the southern states it varies from 5-10%. An important factor that affects the price of the products is the Central Excise Duty payable by the organized/registered manufacturers. There is also a sales tax. For sugar confectionery (without cocoa). The VAT will replace the sales tax regime in all states with a two-tier tax regime of 4% and 12. The general rule is that domestic products are the cheapest.25 – 0. 15. For example. 5/. Most confectionery brands of Nutrine. 100gm Lindt chocolate sells for around Rs. Cadbury and Nestle. it is 8% (recently reduced from 16%). Also. In result most confectionery companies are trying to fit their products in the lower price ranges. There is a big difference in the prices of domestic and imported products. However. 7/-. For example. Perfetti. Then. the Indian market is generally price sensitive.5%. Wrigley’s. and product itself. there are different ranges of prices for imported products. while European and US products are the most expensive. The dominating view is that this duty is earning revenues from two major chocolate manufacturers. for chocolate confectionery.6 Pricing As it was already emphasized. Rs. and Rs. Maharashtra has the highest sales tax. both of which are foreign companies. which varies from state to state. depending on the brand. Candico.

lollipops and chewing gum. On the other hand. when exchanging gifts is a tradition. as well as boxed assortments will grow at the fastest rates. chewing gum. medicated confectionery and power mints are also expected to grow rapidly. Nevertheless. 44 . in the more upscale market segments. so will imports. On the other hand. Lollipops is a new category and has sparked lots of interest among children. Boxed chocolates show the greatest potential for growth within the chocolate category. Experts expect that the adult market will offer an additional niche for some products. As the market grows. Sales are consistent throughout the year. Sugar confectionery will remain the largest segment. 3. the niche for more upscale products will also offer new opportunities for branded products.7 Seasonality Our respondents reported that there are no seasonal trends in the sales of sugar confectionery and gum. The category is expected to continue to grow in the coming years. Imported confectionery products will play a role primarily in the urban areas. The mass market will continue to be very price sensitive pushing manufacturers to price discounting and offering smaller packages in order to continue penetrating the rural market. and new products like mints. they will remain small and with limited impact on the total market.8 Market forecast The confectionery market in India is expected to continue to grow at healthy rates. particularly among the young adults segment.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA The confectionery market in India today + Clearing and forwarding cost + Octroi (a local government tax) = Landed price to importer + Importer margin (% markup on landed cost) = Selling price to distributor + Sales tax = Price to distributor + Distributor margin (7-10%) =Price to a store + Profit (15-20%) =Retail price 3. chocolate sales peak during the festival season (August to February).

rapid growth is expected over the short to medium-term. In 1998. as small independent stores are the main outlet for consumer purchases. supermarkets.2 Domestic production The Indian food distribution system is characterized by a large network of intermediaries consisting of C&F agents. Although this sector is thought to be in its infancy. but today these stores account for 2% of confectionery sales. the retail sector is changing and the organized sector is gaining ground with the emergence of supermarkets and hypermarkets in metropolitan India. from roughly 6% to 8%.1 DISTRIBUTION CHANNELS Overview The Indian food distribution system is characterized by a large number of intermediaries and relatively poor infrastructure. while confectionery manufacturers often rely on C&F agents or dealers to work with the wholesalers and distributors. known as kiranas (see Figure 26). storage. the share of retail sales by supermarkets and hypermarkets has also increased. wholesalers and distributors that operate throughout the country. and frequently these will not 45 . convenience stores. Nevertheless. 4. Figure 26: Confectionery retail sales in 2003 by distribution format (%) Convenience stores 2% Service stations 2% Independent food stores 74% Confectionery specialists 9% Others 5% Supermarkets/ hypermarkets 8% Source: Euromonitor India’s organized retail sector remains the preferred distribution channel for branded and imported products. including confectionery. and refrigeration facilities. creating greater opportunities for imported confectionery products. Manufacturers and importers rely heavily on the middle man for the distribution of confectionery products in India. over the last five years. Most importers rely on distributors or wholesalers to reach retail outlets. It has low levels of efficiency.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels SECTION 4: 4. During the same period. such as transportation. confectionery retail sales in convenience stores were virtually non-existent. However. Only the largest manufacturers may have their own distributors. Confectionery products are predominantly purchased in small independent food stores. and hypermarkets have played an important role in the distribution of confectionery products. with the costs of distribution being rather high. India’s retail sector is highly unorganized.

and using their C&F. domestic confectionery manufacturers in India rely on company-owned dealers or C&F agents who. bus stands Paan Beedi shops 46 . Figure 27: Typical distribution channels for domestic confectionery Wholesaler Manufacturer Wholesaler Stockist/C&F agent – company owned Retailers • • • • • • • • Grocery/Kinara stores Chemists Gift shops Book shops/Newspaper vendors Supermarkets Specialty shops – malls Airport shops. Kolkata. many domestic confectionery manufacturers have access to hundreds or thousands of wholesalers and distributors to reach the small retail outlets in both rural and urban areas as well as to reach the larger supermarkets in the metropolitan areas. Typically. railway stations. and Chennai a company may have 2-3 stockists/C&F agents. Through these dealers. Delhi. manufacturers have several regional sales offices and. agents can access retailers directly within that region. In addition.mostly company) as a starting point for distribution. in some cases. Manufacturers use their own stockists/C&F agents (which are also warehouse/company depots . illustrates the most typical distribution channels for domestic confectionery.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels cover the whole country. In large metro cities such as Mumbai. Stockists/C&F agents are appointed depending on the city and state. Manufacturers also service large metropolitan areas through wholesalers. work with wholesalers and distributors throughout the country to reach the retail network. in turn. Figure 27. In smaller cities and towns where the manufacturers do not have their stockists/C&F agents they generally work with wholesalers.

Coimbatore. and Hyderabad. For many importers. Most major international shipping companies operate regular container services to each of these ports. JNPT is the easiest port to distribute products not only to Mumbai and Delhi. Ahmedabad.1 Imports Ports of entry for imports Figure 27: India’s main ports of entry Jawaharlal Nehru Port Trust (JNPT).2 Geographical and logistical considerations Importing confectionery in India is primarily dependent on the location of the importer and the markets they serve. 47 . Most of the importers operate warehouses near the major ports and. in many cases.3. is India’s largest seaport. This port also offers refrigerated container facilities. The Chennai Port is ideal for serving southern India and is the main port of entry for Chennai. though this is a more expensive option. this is the JNPT port.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels 4. One of these handles refrigerated containers.3. Bangalore. Mumbai also serves other smaller metropolitan areas such as Pune.3 4. and Hyderabad. The third largest port is the Kolkata/Haldia Port and it is the port of entry for the East Indian market and especially the city of Kolkata. importers may use the ports at Chennai and Kolkata. The Chennai Port Trust is an artificial harbor situated on the Coromandel Coast in South-East India and it is the second largest port for handling containers. It is located within Mumbai harbor on the west coast of India. JNPT serves as the port of entry and supplies to the two largest cities – Mumbai and Delhi. 4. Most confectionery imports are imported into India by sea. The port has two dedicated container terminals designed and equipped to handle large size container vessels. Goa. but also to other major commercial and metropolitan areas. also known as Nava Sheva. If imported confectionery is destined primarily to South India or North India. However. two importers that we interviewed import by air.

and the remaining 10 said that they import around 10 containers. one reported 100 to 110.3 Handling of imports Confectionery imports into India are mainly handled by local importers who then distribute the products through a network of distributors.” 48 . we spoke to several importers who focused on the niche market and import only chocolates or only from one country or brand. However. For example. with numerous consolidators working there.3. However. 4.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels Several of our respondents mentioned that Dubai has turned into an important center for shipping product to India. Figure 28 on the following page illustrates the distribution of imported products from the JNPT port throughout India. and sometimes directly to large retailers. only one reported 200 containers. It is important to keep in mind that confectionery imports into India are very small and even the large importers deal in very small volumes. As one manufacturer stated.3. our respondents reported that they import between 10 and 200 containers of confectionery products per year. wholesalers. 4. “A C&F agent or distributor can make or break your brand.4 Business relationships along the distribution chain Given the size of the country. and the large number of intermediaries. established business relationships play an important role in the distribution of both domestic and imported confectionery products in India. Many importers still cover a wide range of confectionery products and import from several different countries. poor infrastructure. The majority of the importers and manufacturers that we interviewed have had long-standing relationships with their agents or distributors or have exclusive arrangements for the distribution of their product. one reported 50 to 65.

THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels Figure 28: 49 .

Kolkata.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels 4. The paan-beedi retailer occupies a slot in a locality in urban and rural India that gives enormous convenience to people looking to buy basic things. They 50 Figure 29: A Kirana in Mumbai Figure 30: Perfetti’s Managing Director in a paan-beedi . . such as kiranas and paan-beedi shops prevail. While small independent stores. positioned to serve the mass market. Today. the shopping mall concept is quickly gaining ground. leading to increasing demand for quality products. account for the vast majority of confectionery retail sales in India. they remain the most popular choice of consumers for food purchases. including confectionery. It is estimated that food products are sold by an estimated 6. organized retailing is growing rapidly and in addition to supermarkets and hypermarkets. These stores.1 Wholesale and retail Role and key players Food retailing in India is changing rapidly. These are second only to agriculture sector in terms of employment. Kiranas Kiranas. are usually found in all busy streets and in residential neighborhoods in most Indian cities and towns. Bangalore. Paan-Beedi The friendly neighborhood paanwalla or the paanbeedi shop has played a key role for the growth of the chocolate and confectionery sector in India. Food and beverage retail sales are estimated at roughly US $135 billion with a growth rate of 4-5% each year. with only a small percent sold in more organized supermarkets and hypermarkets.5 million small grocery stores and wet markets throughout India. out of this. Kiranas often offer a variety of services such as home delivery. Hyderabad and Pune. Chennai.4 4. India has approximately 12 million retail outlets. However. Overall. Mumbai. credit facilities and consumer discounts and Indian consumers remain extremely loyal to these stores. receipts in the organized sector represent less than 1%. small independent food stores. Larger scale wholesale club/hypermarket formats are also appearing. Due to the omnipresence of kiranas and their longstanding existence in India. modern supermarkets are becoming increasingly common in urban areas such as Delhi.4.

Sweet World is a pick’n mix concept store. Gurgaon. These stores typically sell a range of confectionery products from domestic and imported chocolates and confectionery to bulk and branded confectionery products and are primarily aimed at children. which currently has 20 stores in 9 cities in all prestigious shopping malls in Mumbai. Pune. A typical example is the Mumbai based chain Sweet World. ITC Foods. which accounts for more than one million stores and is growing. and Cadbury. and distributors for imported products. but clearly label the origin of their candies. are using these shops and they have become a major distribution channel for their confectionery products. It has become increasingly easier for the paan-beedi shops to expand the breadth and depth of their product line. Delhi. They do not sell branded products. Bangalore. Many fast moving consumer goods companies are increasingly using this vast network. if importers are based locally. Noida. batteries. which sells a wide range of candies. Paan-beedi shops are generally served by C&F agents and wholesalers and distributors. However. They have positioned themselves to serve the more upscale market segment and sell more than 150 varieties of confectioneries. Kolkata and Chennai. and other food items to cigarettes. 51 . Despite the general decline of the share of Figure 31: Sweet World candy store candy stores in overall retail sales of confectionery products. produce. as many branded product brands now come in mono packs and in low unit volumes and prices. C&F agents. Indian candy stores usually purchase from domestic manufacturers. including Nestle. their share has been declining in recent years.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels occupy only about 10 square feet of space and stock everything from chocolates and confectionery. some specialized candy stores and chains are thriving. Candy stores Although candy stores in India account for close to 10% of confectionery retail sales in India. some confectionery retail stores will purchase directly from the importer. Hyderabad. Several of the leading confectionery manufacturers. Perfetti. and personal care items and to branded and non-branded items.

Chennai. A typical supermarket carries about 6. Trivandrum. FSL is India’s largest supermarket chain with 90 outlets located in Chennai. This development will also have an impact on the food retailing and confectionery sectors in particular. Pune and Coimbatore. Pondicherry. Frozen foods are also often available. ft. 52 . However. Nagpur. These are 3. Hyderabad. 3 billion. Cochin. By end of 2003. Kolkata. Many of them have small bakery sections. Ahmedabad. Indore. Scale advantage and superior operations would allow modern large-format stores to be up to 3540% cheaper than the traditional formats. Kochi and Mangalore. expectations are that by the end of 2006. snacks.000 square foot self-serviced and airconditioned stores which stock a wide range (by Indian standards) of groceries. Bangalore. Hong Kong (49%). Shopping malls The shopping mall is a new and quickly growing retail concept in India. Bangalore and the twin cities of HyderabadSecunderabad) with total space of about 5m sq. this space will grow about ten times with a significant part of this new space located in the second tier cities like Jaipur. 4. and some are still experimenting with fresh produce and dairy products. Thiruvananthapuram. all located in the major cities (New Delhi. processed foods. and this would in turn fuel consumer spends.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels Supermarkets and hypermarkets Supermarket retailing is a relatively new.4. Pune. Ludhiana. confectionery. some Indian versions of supermarkets have emerged. It is currently focusing on southern and western India but also has plans to go national in the near future. Mumbai. Although there are no supermarkets that mirror western-style stores.000 to 5. Agra.2 Key retail players Some of the larger supermarkets in India are: • Foodworld Supermarkets Limited (FSL) is a joint venture between the Kolkata-based RPG Enterprises (51%) and Dairy Farm International Holdings. there were about 25 operational shopping malls in the country. They stock most national brands. and cosmetics. though rapidly developing concept in India. It will lead to improved and more streamlined distribution channels and cutting down the number of intermediaries. It has annual sales of approximately Rs.000 stock-keeping units (SKUs). a large number of regional and specialty brands. as well as their own brands of packaged dry groceries. Nashik. Studies done in the specific field indicate that there is the potential to improve productivity in the sector by 250%. According to the global retail and real estate consultant Chesterton & Meghraj. the market share held by the organized retail market will grow from the current 2% to about 20% of the total retail market by the end of 2010. Lucknow. cleaning and personal care products.

Haiko Supermarket is owned and managed by Lakewood Malls Private Limited. thus making it the largest supermarket of its kind in the country. 600 crore Shahid Group of Companies and is a 51:49 JV with Groupe Casino. the food and grocery retail venture. 500-600 million in cities such as Mumbai. BBL is concentrating on promoting their private brands of groceries and provisions. Chennai. Pune and Nagpur in the next four years. owned and managed by Nilgiri’s Dairy Farm Limited (NDFL). While C3 is only found in Kolkata. The group forayed into the retailing business in 1999 with a landmark mega state-of-the-art shopping mall called Crossroads in central Mumbai followed by one in Pune in 2001. expanding to more than 15 stores by 2010 in Mumbai alone. a leading property developer (Rs. It is a Mumbai-based retail chain with 250 outlets. the retail wing of the leading property developers .000 sq. The first Nilgiri’s food retail outlet/supermarket opened in Bangalore in 1905. • • • • • 53 .5 billion). Piryamid Supermarket is owned by the real estate business arm of Piramal Enterprises. the company has plans to expand to other states in the Eastern and North Eastern regions of India. textiles. retailing. is a leading food retailer and manufacturer of dairy and bakery products in southern India (annual sale of approximately Rs. a Rs. Coimbatore and Erode. Sabka Bazaar is North India’s largest supermarket chain and there are 21 Sabka Bazaar stores in Delhi. Piramal plans to expand by around 40 stores with an investment of Rs. groceries. They will be a five-store chain by mid 2007. Crossroads houses 500 of the top international and national brands including Piramyd Supermarket. selling food. Mumbai (LMPL). in terms of the number of outlets. It is a fully air-conditioned with aesthetically designed interior. 15. there are 25 Nilgiri’s Supermarkets all in southern India located in Bangalore. Currently. ft of space.5 billion). Sabka Bazaar is operated by The Home Stores (THS) and is part of a Rs. 35 billion conglomerate and one of India’s largest diversified business houses with interest in pharmaceuticals. The supermarket is spread over 10. Mysore. France a multi-format retailer. and well-designed signage. wide aisles. glass. Haiko Supermarket was launched in June 2000 with its first outlet in a prestigious area in North Mumbai.Hiranandani Group of Companies. immaculate displays. Bombay Bazaar Limited (BBL) is perhaps one of the largest private sector pure grocery retail chains. Currently. has forayed into the hypermart segment with a Super Sabka Bazaar in New Delhi. and provisions.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels • Nilgiri's Supermarkets. THS in association with Ansal Housing and Construction Ltd. C3 – The Market Place is owned by TAI Industries in Kolkata. autocomponents and engineering. 3.

In December 2004. Growth in this sector will be dependent on rising incomes and increasing exposure to the “western” lifestyle.4. Radhakrishna Foodland Pvt. Although the retail sector is rapidly changing. Metro Cash & Carry India Ltd (MCCI). Nirmal Group of Companies. The first SPAR store opened in Mumbai in January 2005 and is the first international food retailer to enter the Indian market. Shoprite opened its first hypermarket with an investment of US $375 million in Mumbai spread across 70. there should be a unique opportunity for imported food products in the supermarket sector in the future. Some of the main. Giant is spearheading the hypermarket revolution in India and in 2004 opened two stores in Mumbai and Kolkata. Ltd. MCCI is opening its second venture in Kolkata in 2005. Ltd – SPAR International. but primarily for domestic products. As a result. larger scale.3 Industry trends affecting or altering the structure of retail food sales The continued growth of the organized retail sector in India will have a huge impact on the country’s distribution channel.000 square feet. GWCL has plans to open similar “Giant” hypermarkets in Bangalore and Chennai in the near future. a leading foodservice distribution company. the Netherlands has signed a license agreement with Rs. to operate in the Mumbai region. Ltd plans to open three new SPAR Supermarkets in Mumbai by 2007. 900m Radhakrishna Foodland Pvt. • • 4. Metro AG. It is estimated the food retail sales in supermarkets and hypermarkets have grown approximately 30% per year in the last three years and this trend is expected to continue in the future. 54 . is scheduled to open its first store in Bangalore in 2003. This is in association with Mumbai based leading property builder. Shoprite Hyper is a 100% subsidiary of South Africa’s largest food retailer. the importance of the smaller independent food stores will still play a role in the Indian distribution channel. Shoprite Holdings Ltd.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels • SPAR Supermarket/Radhakrishna Foodland Pvt. a 100% subsidiary of the German-based cash and carry store. retail formats (hypermarkets) in India are: • Great Wholesale Club Ltd (GWCL) is another venture of the owners of Foodworld Supermarkets who have made their foray in the cash and carry store format by opening the “Giant” hypermarket in Hyderabad in 2001.

Also. However. teenagers.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Distribution channels 4. 55 . retailers do not go into any additional lengths to promote their products. For the most part. they also use promotional activities such as sponsorships of sports and other activities in schools and colleges. and young adults. Aside from the in-store display of confectionery. Their marketing message is primarily aimed at children.4 Types of product promotions used Most of the major confectionery manufacturers in India rely on regional and national television to promote their products. some of our respondents indicated that they occasionally place advertisements in newspapers or magazines around the holiday season and several respondents had plans to use radio promotion in the future.4. some of the importers we interviewed indicated that they consider promotional support from their overseas suppliers important for carrying their products and brands. Thus. importers and retailers are not heavily involved in promotion of confectionery.

CESS 2% Custom Heading No: 17049090 Sugar Confectionery (Incl.20) Retail chocolate (HS 1806.1.1 5.2 Import tariffs The import tariffs for each of the above classifications are as follows: Custom Heading No: 17041000 Sugar Confectionery (Incl. White Chocolate) without Cocoa --Others Unit Duty Rates in % Kilogram(s) Basic 30 % ADD. DUTY 16 % EDU.32.Chewing gum.99) 5. DUTY 16 % EDU.10) Sugar confectionery (HS 1704.1 MARKET ENTRY Tariffs. 1806. import and customs regulations Import and custom regulations All the categories mentioned below are listed under OGL (Open General License) and can be imported freely into the country and no special import license is required.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Market entry SECTION 5: 5. White Chocolate) without Cocoa .31.90) Bulk chocolate (HS 1806.90) Sugar free confectionery (HS 2106.1. whether or not sugar coated Unit Duty Rates in % Kilogram(s) Basic 45 % ADD.90. 1806. Chewing gum (HS 1704. CESS 2% 56 .

CESS 2% Custom Heading No: 18063100 Chocolate & other food products containing Cocoa Other. slabs or bars: . of a content exceeding 2 kg. in blocks. slabs or bars weighing more than 2 kg.Not filled Unit Duty Rates in % Kilogram(s) Basic 45 % ADD. slabs or bars: .Other preparations in blocks.Filled Unit Duty Rates in % Kilogram(s) Basic 45 % ADD. CESS 2% Custom Heading No: 18063200 Chocolate & other food products containing Cocoa -.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Market entry Custom Heading No: 18062000 Chocolate & other food products containing Cocoa . DUTY 16 % EDU. CESS 2% 57 . DUTY 16 % EDU.Other Unit Duty Rates in % Kilogram(s) Basic 30 % ADD. CESS 2% Custom Heading No: 180690 Chocolate & other food products containing Cocoa -. in blocks.Other. granular or other bulk form in containers or immediate packings. DUTY 16 % EDU. paste. Unit Duty Rates in % Kilogram(s) Basic 30 % ADD. powder. or in liquid. DUTY 16 % EDU.

3 An example The following example illustrates the how the tariff is calculated. packaging and labeling. an importer and agent for a US brand. although some recent amendments in the laws will benefit the imports of sugar free confectionery. preservatives and flavoring agents) used by the company are not approved by PFA in India. preservatives. CESS 2% 5. 5. according to one respondent. and labeling requirements The Indian Food Laws could be the main constraint for US chocolate and confectionery manufacturers’ immediate entry into India via the legal channel. For example. packaging. pesticide residues. DUTY 0% EDU. The PFA covers various aspects of food processing and distribution. such as food color.1. 18 18 The Prevention of Food Adulteration Act (PFA) of 1954 and the PFA Rules of 1955 as amended. 70% of the confectionery range of this brand manufacturer cannot be legally imported into India because certain food additives (colors.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Market entry Custom Heading No: 21069099 Food Preparations Not Elsewhere Specified Or Included --Others Unit Duty Rates in % Kilogram(s) Basic 150 % ADD. 58 .2 Food safety. and regulation of sales.

fas. Although. The report can be viewed at: http://www. date of manufacture. who would be able to provide the necessary guidance. the net quantity. Importers of packaged food products must adhere to these acts. and sale price.gov/gainfiles/200407/146107003. 59 . and sale price are provided on the label. These legislative measures are designed to establish fair trade practices with respect to packaged commodities. the net quantity. The latest issue of USDA’s FAS report on India Food and Agricultural Import Regulations and Standards from July 2004 (GAIN report # IN4077) provides excellent background and all necessary information. best before date. the Government of India through a special notification issued by Ministry of Commerce & Industry has allowed the importer to put these special labels/stickers on the consignment at the port of entry in India.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Market entry Also. US manufacturers are not willing to comply with some labeling requirements and special instructions. There may be additional labeling requirements for food items covered under the PFA. informing the consumer of the name and address of the importer.usda. because current volumes are too small to justify the adjustments. the best approach for any potential exporter to India is to establish contacts and work with experienced importers and distributors. date of manufacture. Another government act that needs to be taken into consideration is the Standards of Weights and Measures Act.pdf Overall. including labeling the product. 1977. the name and address of the manufacturer. 1976. The rules are to ensure that the basic rights of consumers regarding vital information about the nature of the commodity. this could be one of the reasons why importers prefer to buy from agents in Dubai and Singapore who are willing to put these additional labels/stickers on the consignment prior to shipment to India. and Standards of Weights and Measures (Packaged Commodities) Rule.

On the other hand. although there is very low awareness of US confectionery products and brands.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Conclusions and recommendations SECTION 6: 6. Indians’ taste will continue to become more westernized and more quality conscious. such as mint and medicated confectionery (with added vitamins and/or other minerals). a few have products targeting premium products. offering higherend foreign brands growth opportunities. although overall sales will remain modest. The United States along with Western Europe are perceived as offering highest quality. However. the very low penetration and consumption levels provide ample opportunities for growth and make competition less of a constraint. will continue to increase. While penetration and consumption levels are still very low. they are still very small leaving ample opportunities for further growth. The availability of imported products has also been rapidly rising since India liberalized its imports regime in 2001. The distribution channels have also undergone substantial changes. overall sales. and particularly sales of higher value premium products have increased. particularly for chocolate are considered the best. and therefore respond positively to confectionery imports. We expect to see growth of new and novelty products. and exporters will face stiffer competition from the domestic sector. particularly boxed assortments for gifts. The popularity of chocolate products. While most domestic companies also focus their new product development efforts on the mass market. With these changes in mind. This trend will be more obvious in the urban areas among middle and upper class consumers. Supermarkets have emerged and started to gain power over other retail formats. as well as the new to the country sugar-free confectionery categories. Indian confectioners are increasing their efforts in product development and promotional activities. Indians associate imported products with higher quality. we expect that: • The share of imported confectionery will continue to increase over the next several years. • • • 60 . where European brands. The sugar confectionery will remain the largest confectionery segment. Nevertheless. for US exporters competition will be an important factor in the upscale niche segments. Nevertheless.1 CONCLUSIONS AND RECOMMENDATIONS General prospects The Indian market for confectionery products has undergone significant changes over recent years.

Importing is a relatively new business in India. particularly in the initial phase of market entry. India remains a very price sensitive market and appropriate pricing is key to the success of new products. Marketing and promotion expenditures for confectionery products will increase and distributors will require promotional support from manufacturers.2 Recommendations • Potential exporters should carefully select trading partners from among the Indian importers and distributors.S. exporters should be willing to offer as much support as possible. There will continue to be opportunities for new products that appeal to the young consumer. These cosmopolitan cities. US exporters should carefully discuss their product pricing and positioning with their chosen partners in India. as well as better developed infrastructure. • • • • 61 . U. with a larger number of affluent consumers exposed to western influences.S. increasing number of marketers have seen growth opportunities in targeting the adult consumer segment. This will lead to new products and marketing strategies aimed at them. exporters may directly contact potential importers and distributors to select their partner(s). Thus U. A proper. formal introduction is important for a new entrant to make effective and productive contacts at potential partner firms. Therefore. and many importers may lack the knowledge and experience to ensure successful distribution of the products they deal with. are most appropriate for introduction of new US products that are generally higher priced than domestic and some imported products. and price lists. • • 6. encouraged by continuing exposure to western culture will keep the doors open for new products and new suppliers. product samples. The typical way of introduction is to send them company brochures. as they will be critical to ensuring presence of their products on retail shelves. They may use the list of industry contacts provided in Section 6 or obtain contact through the US Embassy in New Delhi. The ever-present stimulus of novelty and fashion. it is of critical importance to select the right partner. product catalogues.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Conclusions and recommendations • While the traditional targets for confectionery products have been children and young people. Importers and distributors may have limited financial and human resources. Mumbai and/or New Delhi are the most appropriate entry markets for US exporters.

The other international major brand in India is Lindt. Fantasie chocolate brand is 50 years old and is well known in Western India. France. 62 • • . C3 as well as in convenience/kinara stores. Sweet World commenced operations in 2002 and introduced the Pick ‘N’ Mix concept in India. Twix. Snickers and Bounty from the Mars subsidiaries Masterfoods. these importers did not have an understanding of the complex confectionery distribution channels. gummies. inevitably. These chocolates are imported by a Mumbai based company Sunstar Confection & Trading (Pvt) Ltd who also retails the Lindt’s range through their own air conditioned boutique stores called Fanatise Chocolates in Mumbai.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Conclusions and recommendations 6. nor their target market and. multilocation candy store. a distribution company. There have been several examples where importers with experience in industries from metals to healthcare products partnered with leading foreign confectionery manufacturers to import and distribute their products throughout India. for all of the unsuccessful attempts there are an equal number of success stories. Sunstar Confection & Trading (Pvt) Ltd / Fantasie Chocolates . Vrinka Overseas Pvt Ltd/Sweet World – is perhaps India’s only multi-store. some of the most common mistakes have revolved around seasoned and diversified importers entering the confectionery import market with a keen understanding of importing but a lack of knowledge about the confectionery market and distribution in India. Holland and Masterfoods. The company commenced imports in August 2004. which uses a cold/refrigerated chain to distribute the product all over India and the product is available in all metropolitan areas. USA is perhaps the only company in India that is professionally importing and distributing chocolate in India.. The products are distributed by Snowman’s Frozen Foods Pvt Ltd. Yet.a 100% subsidiary of Mars Inc. chemist shops. the price sensitivity of the confectionery market. cities and main supermarkets such as Foodworld. Food Bazaar. Pune and Bangalore. imports were discontinued and the goal of the partnerships was never attained. Nilgiri’s. Fantasie chocolates also sell their home brand Fantasie through these stores. marshmallows. and grocery stores across India.3 Success stories Distribution is the key to success for high value food items like chocolates. Although these companies did not have success in India’s confectionery import market. There are many examples of both small companies with minimal financial resources and large companies with substantial financial resources who lack adequate experience in the import trade or knowledge and access to distribution channels for confectionery products and who have ventured into the import of chocolates and confectionery but failed. gumballs. Some of these are as follows: • Effem India Pvt Ltd . Sweet World sells over 200 varieties of unbranded imported confectionery including jellybeans. They import products such as Mars. In fact. Subka Bazaar.

Jelly Belly . imports and retails a range of Patchi’s chocolates imported from Lebanon. Pvt Ltd.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Conclusions and recommendations licorice. The company is planning to open two stores in Delhi and one each in Kolkata./Patchi Chocolates – another imported chocolate brand which has a presence in Mumbai.imported and distributed in India by HMA Udyog Ltd. all of them in the prestigious malls in major metropolitan areas across India.imported and distributed in India by HMA Udyog Ltd. Their flagship store. Hyderabad and Pune in 2005. Tootsie – imported and distributed in India by Optimum Marketing Metrics Pvt Ltd. Brach’s . Pvt Ltd. • Brook Trading Co. Skittles anad M&Ms – imported and distributed in India by Optimum Marketing Metrics Pvt Ltd. etc.imported and distributed in India by Balaji Victuals Pvt Ltd. Patchi.. and Hillside Candy . Just Born . Bangalore. India is Patchi. Hasbro – imported and distributed in India by Microtrack Business Systems Pvt Ltd. Mumbai based Brook Trading Co. 63 . opened in Crossroads.imported and distributed in India by Optimum Marketing Metrics Pvt Ltd. There will be 20 Sweet World stores in India by March 2005. an upmarket shopping mall in Mumbai in 2003. Other US chocolate and confectionery brands that have established some small presence in India over the last three years are: • − − − − − − − − Hershey’s – imported and distributed in India by Kaivan Foods.

Ravi Sureka International Marketing Network (Agent for Toblerone – importer of chocolates) Plot No.V. Kurla Industrial Estate L. Marg Ghatkopar (W) Mumbai – 400 086 Tel: +91 22 25138455 / 25116795 Fax: +91 22 25139318 Email: kaivanbalsara@yahoo. 64 .S. 7.P.sweetworldonline.com Mr. K. Kaivan C.com Ms. Arti Manoj – Marketing Controller All India Sunstar Confection & Trading (Pvt) Ltd / Fantasie Chocolates (Agent for Lindt – importer of chocolates. Balsara Group of Companies 3.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Industry contact information SECTION 7: 7. J. 11. Dr. Scheme Mumbai – 400 049 Tel: +91 22 26134826 Fax: +91 22 26184485 Email: imnindia@rediff. Road No. Ashok Nagar Society N.com Mr. Balsara Kaivan Foods (Agent for Ferrero Rocher and Hershey’s – importer of chocolates) C.com Website: www. Also manufacturer of Fantasie chocolates) “Sun-Ville” 9.D.B. 225 Nariman Point Mumbai – 400 021 Tel: +91 22 2202 7309 / 2202 7335 Fax: +91 22 2281 6122 Email: vrinda@sweetworldonline.S. Annie Besant Road Worli. Vrinda Rajgarhia – Director Vrinka Overseas Pvt Ltd (Importer and retailer of candy and confectionery) 46. Jolly Maker Chambers II.1 INDUSTRY CONTACT INFORMATION Confectionery importer-distributors and wholesalers Ms.

com Kolkata Address: 1. Andheri (W) Mumbai – 400 053 Tel: +91 22 3090 7575 / 2670 5686 Fax: +91 22 2670 7110 Email: bajorias@vsnl. Nagar. uni@bom8. Chetan Gokal – Director Brook Trading Co. / Patchi Chocolates (Agent for Patchi chocolates – Importer and retailer of chocolates) Kasturi Building. British Indian Street Kolkata – 700 069 Tel: +91 33 2210 2479 65 .net. Nagdevi Street.com/fantasie Mr.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Industry contact information Mumbai – 400 018 Tel: +91 22 2493 5546 / 2497 8082 Fax: +91 22 2492 1604 Email: sunstarconfection@hathway.com.in Mr.webindia. Jamshedji Tata Road Mumbai – 400 020 Tel: +91 22 2202 0590 / 2202 2291 Fax: +91 22 2285 3713 Email: patchi@brooktrading. Pvt Ltd. Sanjey Bajoria – Director Bajoria Foods Pvt Ltd / Virgo Marketing (Importer of candy and confectionery) 41/1623 D. 5th Floor. Haveliwala – Director Uni Colloids Impex Pvt Ltd (Importer of bulk chocolates) 206.com Mr. A.vsnl.com Website: www. N.brooktrading.com Website: www. 2nd Floor Valiulla Compalex Mumbai – 400 003 Tel: +91 22 23439215 / 0214 / 2342 9872 Fax: +91 22 2343 5916 / 5637 0959 Email: unicoll@vsnl.

THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Industry contact information

Mr. Rajesh Sanghvi - Director Delta Chem Impex Pvt Ltd (Agents for Barry Callebaut – importer of chocolates) C-13, Sri Ram Industrial Estate 13, G. D. Ambedkar Road Wadala Mumbai – 400 031 Tel: +91 22 5662 1093-94 / 5662 5440 Fax: +91 22 5662 1095 / 24181770 Email: rajesh.sanghvi@anmalliance.com, cheminfo@amalliance.com Website: www.anmalliance.com Mr. Chetan Jaikishan - Director Express Foods (Importer of bulk chocolates. Also manufacturer of cookies and breakfast cereals) 444 Kewal Industrial Estate S.B. Marg, Lower Parel Mumbai - 400 013 Tel: +91 22 2281 3695 / 2281 7436 Fax: +91 22 – 2495 2923 Email: expressfoods@vsnl.com Website: www.expressfoods.net Mr. Manoj Dugar – Managing Director Mr. Sumit Khandelwal – Director Dugar Overseas Pvt Ltd (Agent for Ritter Sport and Accor - Importer of chocolate, candy and confectionery) D-65, Anand Niketa Lower Ground Floor New Delhi – 110 021 Tel: +91 11 8661240 / 41 Fax: +91 11 2467 8475 Email: smk2@vsnl.com Mumbai office: D-311 Crystal Plaza Link Road, Andheri (W) Mumbai – 400 053 Tel: +91 22 56926778 / 70 / 80 Fax: +91 22 56914975

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THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Industry contact information

Mr. Saswata Sengupta – Chief Execuitve Rai & Sons Pvt. Ltd (Agent for Ricola – importer of candy and confectionery) 9-A, Connaught Place, New Delhi-110001 Tel: +91 11 2332 1270 / 2331 1681 Fax: +91 11 2332 7598 / 23317117 Email: saswatsengupta@rai-group.com Website: www.raifoods.com Mrs. Bina Modi – Director Yum n Yumi Candy (Agent for Hillside Candy - importer of candy and confectionery) HMA Udyog Ltd E 49/11 Okhla Industrial Estate Phase II New Delhi – 110 020 Tel: +91 11 2638 5797 Fax: +91 11 2638 9138 Email: binamodi@satyam.net.in Mr. Tushar Gupta - Director Tushar Nutritive Foods Pvt. Ltd (Importer of bulk chocolates) 508,B-9, ITL Twin Towers, Netaji Subhash Marg, Pitam Pura, Ring Road. New Delhi – 110 034 Tel: +91 11 2719 1823 Fax: +91 11 2719 3510 Email: tushar@nda.vsnl.net.in Website: www.foodtechmart.com Mr. Atul Khanna – Director Operations Optimum Marketing Metrics Pvt Ltd (Agent for Skittles and Tootsie - importer of candy and confectionery) 203, Okhla Industrial Estate, Phase III New Delhi – 110 020 Tel: +91 11 5100 0034-35-36 Fax: +91 11 5100 0037 Email: optimum@ommindia.com, optimumindia@rediffmail.com Website: www.ommindia.com

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THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Industry contact information

Mr. Sunil Rai – President Balaji Victuals Pvt Ltd (Agent for Brach’s – importer of candy and confectionery) W-28, Green Park Main Lower Ground Floor New Delhi – 110016 Tel: +91 11 26965158 Fax: +91 11 26965147 Email: sr@balajivictuvals.com Mr. J. P. Bagaria – Managing Director Rangdev Holdings Pvt Ltd (Agent for Nestle, Swiss Delice and Stella Chocolates, Fazer Chocolates, Jacali Chocolates and Swiss Navy Candy – importer of chocolates and Candy) 46, Strand Road, 1st floor Kolkata – 700 007 Tel: +91 33 22580350 Fax: +91 33 22580340 Email: rangdev@vsnl.com Mr. N. Balasubranaian – National Sales Manager Effem India Pvt Ltd (Subsidiary of Mars Inc., USA - importers of chocolates) 1st floor, Ashoka Hitech Chambers Banjara Hills, Road No. 2 Hyderabad – 500 034 Tel: +91 40 23555900 Fax: +91 40 23551528 Email: n.balasubrananian@eu.effem.com Mr. Anil Shroff – Director Essence Empire (Agent for Swiss Confisa, Switzerland and Haribo, U.K. – importers of chocolates and confectionery) 228-231, Kaliandass Udyoh Bhavan Premises, Co-op. Society Ltd., Century Bazar Lane, Prabhadevi, Mumbai - 400 025 Tel: +91 22 5660 8260 / 5660 2203 Fax: +91 22 2438 0426 Email: nilima@ essenceempire.com

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Chennai .com Mr. Nag & Associates Pvt.600 002 Tamil Nadu .candytreatsindia. International / H.President & Chief Executive Retail Sector Foodworld Supermarkets Limited Spencer Plaza. Greater Kailash .com 7.com Mr. Rajiv Tibrewal -Managing Director Microtrack Business Systems Pvt Ltd / Taurus Confectionery India (P) Ltd 1. Raghu Pillai . Ltd (Agents for Paton’s Australia and Walter Heindl Confiserie. New Delhi .II. Harcharan Singh Nag – Managing Director M.2 Key retail candy accounts across marketing channels Mr.India Tel: +91 44 2851 0708 / 2841 8990 Fax: +91 44 2859 4563 69 .THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Industry contact information Mr. Anna Salai.S.com Email: info@candytreatsindia. B. Jay Jindal – Managing Director Jindal Dyechem Industries Ltd.110048 Tel: +91 11 2921 1383 Fax: +91 11 2921 6213 Email: thenags@thenags. 769. IV Floor. Room .700 017 Tel: +91 33 302 20300 / 2280 9477 Fax: +91 33 2280 1853 Website: www.505 Kolkata . Austria) 106 DLF Cinema Complex. Italy) 110 Babar Road Connaught Place New Delhi 110001 Tel: +91 11 234 11800 Fax: +91 11 234 11801 Email: info@jindalartglass. (Agents for Sorini. Rawdon Street "Shubham" 5th Floor.

. Phase I. Gopalkrishnan .India Tel: +91 22 5644 2200 Fax: +91 22 5644 2201 Mr.700016 West Bengal .UT Tel: +91 11 2681 9692 -5 Fax: +91 11 2681 1665 / 2681 4573 Mr. Mirza Ghalib Street.400 060 Maharashtra . C. Bangalore .560 034 Karnataka . Shyam Nagar.India Tel: +91 80 2552 7124 / 2550 6705 Fax: +91 80 2552 7125 Mr. 2nd Cross. 8th Main. Kishore Biyani – Managing Director Food Bazaar Pantaloon Retail (India) Limited Pantaloon Knowledge House. Koramangala. Off Jogeshwari-Vikhroli Link Rd. 3rd Block. Wangchuk Dorji – Managing Director C3 Supermarkets Tai Industries Ltd 53-A.India Tel: +91 33 2249 2956 / 2229 2292 / 2229 8489 Fax: +91 33 2249 7319 70 . 3rd Floor Kolkata . Mumbai.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Industry contact information Mr. Mohammed Abdulla – Managing Director Subka Bazaar Home Stores (India) Ltd D-169 Okhla Industrial Area.Managing Director Nilgiri’s Supermarket Nilgiri’s Dairy Farm Limited / Nilgiri’s Franchisee Private Limited 404/A. Jogeshwari (E). New Delhi – 110020 .

Bangalore .India Tel: +91 44 2849 3611 Mr Harsh Bahadur . Ltd. Chennai . Central Avenue. No.India Tel. Subramanyanagar.: +91 80 2219 2000 Fax: +91 80 2219 2200 71 .560 055 Karnataka .400 076 Maharashtra . Raghu Pillai .THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Industry contact information Mr. 26/3.India Tel: +91 22 2579 7888 Fax: +91 22 2579 7967 Mr. 9. IV Floor.Country Manager and MD METRO Cash & Carry India Pvt. Dungarwal – Chief Manager – Development & Operations. Ward No. Industrial Suburbs.600 002 Tamil Nadu . 769. Hiranandani Gardens.India Tel: +91 22 5666 9520 . 'A' Block. K N Iyer .CEO (Retail) Piramyd Supermarket Piramal Holdings Ltd Khatu House Mogal Lane Mahim (W) Mumbai 400 016 Maharashtra . Powai Mumbai .22 Fax: +91 22 5666 9526 Mr.President & Chief Executive Retail Sector GIANT Great Wholesale Club Limited Spencer Plaza. Susil S. Anna Salai. Haiko Supermarket Lakewood Malls Private Limited Olympia.

THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Industry contact information Mr. Godrej & Boyce Industrial Complex Vikhroli (E) Mumbai 400 079 Maharashtra .India Tel. B. Singh – Country Manager India Shoprite / Megasave Trading Pvt Ltd Plant 18-B.com 72 .: +91-22-5598 6464 Fax: +91-22-5597 1767 Email: response@rkfoodland. Mayank Tandon – Head Marketing & Sales SPAR Supermarket / Radhakrishna Foodland Pvt. Radhakrishna House Majiwade Thane (W) – 400 601 Maharashtra . Ltd.India Tel: +91 22 5518 0102 / 03 Fax: +91 22 5518 0105 Mr.

Sodium bicarbonate. Flavoring. cinnamon. the basic ingredients are: • • • • • • • • • Milk (fresh cow and buffalo milk). any person actively associated with the profession of sweetmeat making was known as Halwai but with rapid social change due to industrialization. -. Besan (Gram or other peaa or bean flours). In most parts of India. Dried (and oftern baked or roasted) cardamom. Kheer (‘condensed milk’) and khoya (‘dried milk’). Apart from hospitality. Though it is impossible to describe all the ingredients of sweetmeats. migration. lemon.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 1: Indian sweetmeats APPENDIX 1: INDIAN SWEETMEATS Sweetmeats in India have a great cultural significance as they are accepted as a mark of hospitality in almost every section of the society. Sugar. Dried fruits and nuts (primarily almonds. Almost every state or region has its sweetmeat specialty and traditions associated with it. mango. Chenna (cottage cheese). pistachio (green) and other edible coloring agents). But the rapid growth of communication. urbanization. birthdays and graduation parties. cloves. The country is the third largest producer of sugar in the world and a large producer of milk. they are a must during most religious performances. anniversaries. and coloring agents (e. and • • 73 . festivals and other social occasions such as engagement and wedding ceremonies. and cassia leaves. Historically. cochineal (red). turmeric (yellow).the most common cardamom flavor. cashews and raisins). Ghee (butter melted until the watery content is expelled). peel. For most Indian people sweetmeats form a part of their culture and tradition. various forms of refined or unrefined sugar (gur or jaggery). ginger.saffron (zafran). this caste does not exist anymore. Sweetmeats and other sweet dishes form an important part of the dietary pattern in India. etc.g. etc. rose water. Safead (rice-flour). and industrialization has led to the diffusion of sweetmeats from one region to another. although you can find traditional Halwais in all large cities. Hot spices. they are known as mithai although there are some regional variations in names. -. pistachios.

Pakizas and a wide range of Bhoj. Tradition plays a major role in kheer or khoya sweets. variety. freshness. We estimate about 85% of the total sweetmeat sector remains in the unorganized sector. The smaller towns and rest of rural India are dominated by the unorganized. Hyderabad. There is no quantification of the scale or share of this more ‘organized’ sector but the larger sweetmeat operations only exist in large cities such as Mumbai. often both manufacturing and retail of sweets take place in the same location. and Chennai. Dry fruit sweets are prepared from almonds. The market is difficult to estimate as these are manufactured at home or by the over 60. For this reason. and pistachios.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 1: Indian sweetmeats • Barak/Tabqka for decorating the more expensive sweetmeats (e. Most of the sweetmeats are milk based and perishable with a shelf life of less than a day.g. corner shop sector. rose petals. and convenience. Sandesh. small. Anurodh. etc). including of Ladoos. taste. There are often several such small shops catering for each residential area The small halwaiis co-exist with a few hundred larger regional sweet companies that sell sweetmeats under their store names and sometimes end up as regional brands. Kolkotta. These operations usually emerge in the larger cities and could be considered the beginning of a more organized industry. Figs and raisins are also widely used. Gulab Jamuns.000 odd sweetmeats shops (called halwaiis or mithai wallahs) which dot almost every street in India. • • • Structure of the sweetmeats sector The Indian sweetmeat market is roughly estimated at 1million metric tons. This unorganized sector has lower hygiene and quality standards. Bangalore. These include Badam Pista Katli. cashews. Again. New Delhi. silver leaf. Chum Chums. Ghee sweets are made by using ghee as a base with besan and safead. Bengali sweets are the most popular and are made from Chenna. The Indian sweets can be broadly categorized as follows: • Milk Sweets are made from kheer or khoya. and products have very short shelf life. These include the Rasgullas. Kaju Katli and Anjeer Burfi. Halwas and Pinnis and the famous Sohan Papdis. smaller scale. Kaju Anjeer Roll. Some of the larger operations would have a central production facility/factory which caters to the 74 . The range includes a wide range of variations such as Pedas and Burfis. there is a wide range types. Consumer loyalty is built by consistent quality.

Bikanervala which began as a namkeens brand in 1950.New Delhi Bikanervala Foods Pvt Limited . Owned by the Gupta family. G Pulla Reddy started his business vending sweets on a small cart way back in 1948 and today his name is synonymous with sweets in the historical city of Hyderabad. Punjabi Chandu Halwai was established in 1896 in Karachi (now in Pakistan). Brijwasi Sweets . Most of these have been established for many years and remain in the hands of the original family owners. Adyar Ananda Bhavan perhaps is Chennai’s only truly ethnic South Indian sweetmeat manufacturer with 7 branches spread over the city. Ramswaroop Goyal and continues to be managed by the Goyal family. Punjabi Chandu Halwai sells a wide array of sweetmeats and namkeens through its 11 branches in Mumbai. Nathu’s has recently diversified into event catering business. Pulla Reddy Sweets Hyderabad 5 branches 2 branches Nandhinee Sweets Chennai Adyar Ananda Bhavan Chennai 8 branches 9 branches 75 . Today. It was established in 1945 by Mr. sweetmeats. Bengali Sweets and Ghee Sweets. Nathu’s Sweets started as a single outlet in 1995 and over the past six years has expanded to six.Mumbai Punjabi Chandu Halwai Karachiwala .Mumbai 15 branches 11 branches The two top sweetmeat brands in Mumbai are Brijwasi and Punjabi Chandu Halwai. G. Usually the production facility and the retail outlets are located in the same city. Nandhinee Sweets has eight branches in the city of Chennai and sells a wide range of South Indian. Nathu’s is the most popular brand in Delhi. today has six restaurants in Delhi selling a wide range of their namkeens. After Partition in 1947. Pulla Reddy has 2 branches selling a wide range of milk and dry fruit sweets. Nathu’s Sweets runs restaurants in these branches and also sells a wide range of sweetmeats and namkeens.New Delhi 6 branches 6 outlets Arya Bhavan Sweets Bangalore G.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 1: Indian sweetmeats company’s own retail outlets and sometimes to other retailers as well. Another brand. Brijwasi Sweets is Mumbai’s leading sweetmeat manufacturer. Arya Bhavan originally from the temple town of Madurai in Southern India is perhaps the only the popular sweetmeat brand in Bangalore today and currently has 5 branches. the business moved to Mumbai and the company soon established itself as a reputable manufacturer of sweets and savories. Nathu’s Sweets . Mr. Mumbai is a cosmopolitan city and Brijwasi Sweets caters to the needs of all communities through its 15 outlets all over Mumbai. snacks and other food items. Nathu’s is a household name in Delhi today. The following table lists some larger sweetmeat operators in India.

THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 1: Indian sweetmeats Attempts to develop a larger scale production of sweetmeats have been limited to a few products such as rasagolla (a spongy succulent sweet) and shrikhand (a traditional curd-based milk sweet). the canned sweetmeat concept has yet to be embraced by Indian consumers.000 metric tons. Two companies K C Das Pvt Ltd. The most popular brand is Amul from Gujarat Cooperative Milk Marketing Federation Ltd. On the other hand. organized efforts have been fairly successful in branding shrikhand. Others include Warana from Warana Dairy and Aarey from Aarey Dairy. The majority of the sales of branded shrikhand are in Western India. Kolkatta and Haldiram Foods International Ltd. respectively. The market for branded shrikhand alone is estimated to be 7. 76 . However. Nagpur both sell branded canned rasagollas under their brand K C Das and Haldiram’s. especially in Mumbai where it is a traditional sweet.

Cadbury India Limited Company name and ownership details Cadbury India Limited is a 51% subsidiary of Cadbury Schweppes plc. − Cadbury India gets some of its chocolate and confectionery products packed through contract packing.470 mt/pa. 5.539 equity shares at a price of Rs. and in Malanpur. Recent performance FY ending 31 Dec. and Cadbury Schweppes Mauritius is in the final phase to enable the de-listing of CIL from Indian stock exchanges and have announced their final cash offer to purchase outstanding public shareholding of 9. Kerala State.. UK and is the largest manufacturer of chocolate. located in Thane and Nduri. The Business Line.K.11m − Net Profit: Rs. Indian Public Limited Company. Maharashtra State.298. 456. U. Sources include the companies’ annual reports.. Installed capacities: − Cocoa powder – 900 mt/pa. It also has cocoa operations in Kottaym.83. Cadbury Schweppes Plc. 500 each.140m 77 . Calcutta and Delhi SXs. The company has 3 factories. Cadbury India sale of chocolates and confectionery products were valued at Rs.76% of Cadbury India. the internet and various publications such as The Economic Times.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles APPENDIX 2: KEY MANUFACTURERS’ PROFILES The following profiles have been compiled mainly on the basis of our desk research and to a smaller extent the trade interviews. − Chocolates and confectionery – N/A as products are manufactured at integrated plants. Madhya Pradesh State. − Malted foods – 6. 2003: − Sales: Rs. The two companies have announced their decision to purchase the outstanding public shareholding which comprises of 34. 7. confectionery and malted food products in India.50m − During FY2003. Listed on Mumbai.

Gums. During FY2003.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Main activities A manufacturer of chocolates and confectionery. launched Perk and Gems in smaller pack size priced at Rs. complexity of portfolio and status as a role model. Cadbury India has a 5% market share in the organized sugar confectionery segment. Inc. Crackle. Cadbury India entered this segment with the acquisition of the Adam’s brands from Warner Lambert India Pvt Ltd. 65% of Cadbury India’s revenue is from the sale of chocolates. strategic direction. The acquisition is now poised to become a growth area for Cadbury India. The company announced that it will strengthen its position in the confectionery sector and will launch some of their gum brands such as Trident. 2 and launched Bytes a chocolate flavored wafer snack. • • • • • • • Cadbury India has 70% of the domestic chocolate market... Dentyne. • Cadbury India chocolate brands include: Dairy Milk. and soft drinks. 78 . Cadbury India was selected amongst the top 10 “Great Places To Work” in corporate India by Great Place To Work Institute. The Cadbury brand is synonymous with chocolates in India. malted foods and drinking chocolate. Cadbury India also markets Halls and Clorets under the Adam’s brand in India. in 2002. USA • Products and brand presence Chocolate and confectionery. Cadbury India has setup an entirely new network for its confectionery range and is not using its existing chocolate network. which was consequent to the acquisition of the global nonchocolate confectionery business of Pfizer Inc. India’s best companies were identified on the basis of four characteristics: value creation. Bubbas and Chiclets in 2005. 5 Star. Kearney. and the confectionery brands are Éclairs and Gems. Perk. Temptations. USA by Cadbury Schweppes plc. Cadbury India was bestowed with the award for the first Business Today – A. UK. • During FY2003.. Cadbury India also focused on newer gifting formats for various occasions. T. Cadbury India launched Double Deck and Caramello a new milk chocolate variant. 12% of Cadbury India’s revenue is from the sale of sugar confectionery. India’s Best Managed Company. During FY2003. During FY 2003.

access to global technology and a strong base for raw material collection. Switzerland. Soft Drinks. and − Samalkha. distribution network. Indian Public Limited Company. It also has an advantage of brand equity. Nestle India has a large number of contract packers in India. which contributes 22% of the company’s revenue. − Nestle India gets some of its chocolate a confectionery products packed through contract packing. − Cherambadi. Haryana State. Crush and Tonic Water. Installed capacities: − Chocolates & Confectionery – N/A as products are manufactured at integrated plants. Distribution and future outlook Cadbury India is aiming at the development of its retail network in rural areas for expanding its sales volume and turnover. Nestle India Limited Company name and ownership details Nestle India Limited is one of India’s largest companies manufacturing consumer food products.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Malted Foods. Punjab State (for confectionery products). in Goa State. − Nanjangud. Cadbury India has an arrangement with Pure Drinks Ltd to manufacturer a range of soft drinks such as Canada Dry. In addition to its six factories. Listed on Mumbai and Delhi SXs. NIL is a 51% subsidiary of Nestle SA. which enjoys a market share of around 16%. Other malted foods are Cadbury’s Drinking Chocolate and Cadbury’s Cocoa powder. Karnataka State. − Moga. Cadbury India has the strong brand presence of Bournvita. 79 . The company has six factories in the following locations: − Bicholin and Ponda. Tamilnadu State.

366m.price point was well received. tea. 2/.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Recent performance For FY ending December 31 2003: − Sales: Rs. continued to gain in volumes. During FY2003. The Kit Kat brand is among the largest selling chocolate brands in India. Nestle India earmarked 25% of its product portfolio at affordable price points and cut prices of Kit Kat to drive volume growth. 10. 80 . Nestle India forayed into chocolates and confectionery in 1990 and has cornered a quarter of the chocolate market in India.631m − During FY 2003. Nestle India continued to strengthen their presence in the market. 3. Nestle Chotu Munch. Nestle Krunchy. milk products. 2. • • • Nestle Munch. and “Chocolate and Confectionery”. chocolates and confectionery. Nestle India manufactured 21. Manufactures products in categories that include: “Milk Products and Nutrition”. “Prepared Dishes and Cooking Aids”. It has expanded its products range to all segments of the market.23. Main activities Manufacturer and marketer of coffee. During FY 2003. Nestle Choco. malted beverages. bringing the brand on a par with the chocolate industry benchmark price points of Rs. Products and brand presence Chocolates and confectionery. Nestle Fruit & Nut. 2. Nestle India launched a range of innovative and renovated products in this category that includes Nestle Milk Chocolate. Nestle Coffee Éclairs and various flavors of Chocostick. instant baby cereals & foods. which was launched at Rs. Nestle India cut prices of Kit Kat by up to Rs. • • 14% of Nestle India’s turnover is from the chocolate and confectionery. It sustained momentum through innovative consumer promotions and trade offerings and supporting key price points.450 MT of chocolates and confectionery products valued at Rs. the largest selling unit in the wafer segment and the most widely distributed. “Beverages”. Nestle Milkybar Starz.077m − Net Profit: Rs. instant foods and culinary products. Nestle Chocolate Éclairs. 5 and Rs. During FY 2003.

Bar-One. (LICL). for Rs. adversely affected Parry’s business and could not support further investments.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Nestle India brands include: • • • Chocolate: Milky Bar. Nestle India has a retail distribution network of 650. Nestle India is revamping its distribution structure to drive growth. Nestle Rich Dark.6447m and will further acquire 20% of Parry’s in the near future. Distribution and future outlook Hit by the low sales growth in chocolate and confectionery segment. Lotte India Corporation Ltd. was part of the Rs. etc. 81 . serviced by a network of over 4. Murugappa Group sold 60. • • Parry’s was a pioneer of the confectionery industry in India and was the first Indian company to setup its factory in 1914. In this changed market environment. Soothers. formerly Parry’s Confectionery Limited (PCL). the Murugappa Group found it difficult to pump in money continuously to build and sustain the confectionery brands and decided to exit to divest the group's stake in Parry’s in the best interest of its shareholders.000 distributors. All confectionery products are sold under the umbrella brand Allen's. Company. Marbles. Korea. • Indian Public Ltd.300 towns. Confectionery: Polo. The entry of multinationals in the Indian confectionery sector over the last decade. Munch.000 outlets reaching 3. The company has added 15 regional sales offices in its sales and distribution structure from January 2004 to drive product reach into the smaller towns and cities across the country. Company name and ownership details Lotte India Corporation Ltd. It is expanding its retail distribution reach and expects to cover 1million outlets.000m Murugappa Group and is India’s leading manufacturer of confectionery in India. Frootos and Milkybar Éclairs. 29.39% of its stake in Parry’s to Lotte Confectionery Co Ltd. During 2004.

For FY ending March 31. 2004: − Sales: Rs. Maharashtra) Main activities Manufacturer and marketer of sugar boiled confectionery.sugar panned chocolate buttons. 1.medicated candy. Finland to manufacture and market Smilees brand . • During FY1999-00.000 per annum. Lotte India upgraded its quality systems and received the ISO9001-2002 and ISO 14000 certifications and also HACCP certification from BVQI for its plant in Nellikuppam. Tamil Nadu. Kerala and Sangli. During FY2003-04.005. installed capacities cannot be ascertained.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Listed at Chennai and The National SXs.400 MT of assorted confectionery. cocoa and milk based toffees. 82 . During FY2003-04. • • • Lotte India brands have a 24. Lakerol brand . Korea will introduce Lotte brands to the Indian market. candies and mints. and Chewits brand . Lotte India brands have a strong presence in the 25 paise price segment. Lotte India produced 8. it entered the deposit candy segment through the launch of Butter Scotch Rings.2m − Net Profit: Rs. 250m but had to exit from this business as the products could not be adapted to India’s tropical climate conditions.5% market share of the confectionery industry and a 28% market share in the toffee segment. − During FY2003-04. Tamilnadu Installed capacities: − Products are manufactured at integrated plants and hence.8m − One factory located in Nellikuppam.chewable toffee with an investment of Rs. The Lotte India management will continue with the existing Parry’s brands for the next five years and will pay EID Parry’s a royalty of Rs 500. • Products and brand presence Confectionery. − Lotte India has an exclusive arrangement with two independent contract manufacturers (one in Cochin. 7. After that period Lotte Confectionery Co Ltd. Parry’s entered into a joint venture agreement with Hutamaki Oy Leaf.

All are sold under the umbrella brand of Parry’s / Lotte Distribution and future outlook Lotte India currently has 800 distributors and plans to appoint an additional 400 distributors India-wide. Coffee Bite. Recent performance: Sales turnover for the FY ending March 31.000 outlets throughout the country. multi-market giant and continues to be the single largest manufacturer of confectionery and toffees in India since 1980. Lotte India’s brands are retailed through more than 300.000 MT of assorted confectionery. − During FY2003-04.800m 83 . 1.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Lotte India portfolio of consists of 16 brands aiming the children and teens consumer segment. Lacto Bon Bon. 2003 were approximately Rs. Soft Spot. Andhra Pradesh State Installed capacities: − Products are manufactured at integrated plants and hence installed capacities cannot be ascertained. 330m. Pvt Ltd Company name and ownership details Nutrine Confectionery Co. During FY1999-00. Caramilk and Fruitz. Nutrine Confectionery Co. USA for Rs. Lacto King. located in Chittoor. Some popular brands include Parry’s Éclairs. • • Nutrine has grown to be a multi-product. Indian Public Limited Company Not listed on any SX. Nutrine produced approximately 28. Cricket. Coconut Punch. Pvt Ltd (Nutrine) is the flagship company of the Nutrine Group of Companies owned by the Reddy family and the largest Indian owned manufacturer of sugar and chocolate confectionery. Mocca. Madras Café. Nutrine sold its biscuit brands and bakery division to Sara Lee Corporation. Shakti. Nutrine has one factory. Joozy Mangoh. The company plans to infuse funds and expertise into the company by introducing new products including gums and other innovative products from the Lotte international kitty.

Marvel. Gulkhand. Eighty percent of the market comprises products at the 50-paise price point. Amras. Distribution and future outlook Nutrine brands are marketed through 400. cocoa and milk based toffees. Caramella. Wild Koffy. 84 . Elaichi. Nutrine brands have a 28% market share of the confectionery industry. • • • • • The Nutrine's Maha Lacto brand is among the most popular. candies.000 wholesalers and dealers and 10 million retail outlets. and − Fruit bars: Naturo.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Main activities Nutrine manufactures and markets sugar boiled confectionery. Products and brand presence Nutrine’s main brands are as follows: − Confectionery: Koka Naka. − Toffeees/Eclairs: Aasay. Nutrine spends 8% of its turnover on advertising and brand promotion per annum. and Lolli pop. Nutrine is the major sponsor of sports events at school and college levels and has a national brand presence. Nutrine Gold. bringing about Rs 1.000m. The company is adding another 600-tonne-per-month capacity by installing a new process line for deposit candy in its factory with an investment of Rs. 100m – 120m and also plans to launch 4-5 new brands under the deposit candy range. All are sold under the umbrella brand Nutrine. Maha Lacto. Superstar. éclairs and fruit bars.

• Candico was earlier the confectionery division of Bakemans India Ltd. sales turnover was approximately Rs. Products and brand presence Candico manufactures and markets 8 to 12 brands. mints and toffees. teens.000 mt/pa. Candico has one factory.a strength it is using for serving the demands of national and international markets. • • • Candico is the 4th largest manufacturer of confectionery products and has a market share of approximately 8%. Candico is the only company in India that manufactures all four categories of confectionery .THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Candico India Limited Company name and ownership details Candico India Limited is the largest manufacturer owned by the New Delhi based Kumar family of confectionery in India.250m. Candico brands have a strong presence in the northern states of India. located in Nagpur. Main activities Manufactures and markets sugar boiled confectionery. and young adults. During 2002.. 320m in its state-of-the-art manufacturing plant. all targeted at children. candies. Recent performance For the FY ending March 31 2004. The company has invested Rs. Candico is the only Indian MNC in the confectionery sector. Ltd.candies. gums. • Indian Public Limited Company. lozenges and gums . a large manufacturer of biscuits and bakery products which was hived off in FY1997-98 as a separate company. 85 . Candico earns a significant portion of its revenue through contract manufacturing. Maharashtra State with installed capacity of 45. Candico sold its Mint-O brand to ITC Foods a division of Indian Tobacco Co. 1. toffees. Not listed in any SX.

000 individuals. Candico invested US$ 1million to setup a 3. Distribution and future plans • Candico products are sold through a 1. Candico is into preliminary negotiations with international chocolate and confectionery manufacturers who wish to introduce their product range into India. Candico has identified candy retail as one of the potential segments for future growth and is actively exploring this opportunity. Technical collaboration • • Technical collaboration with Curt Georgi. Jucee Mango and Lacto.500 distributors countrywide network.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles • Candico is actively engaged in contract manufacturing/private labeling for numerous international and Indian companies. • • 86 . Éclairs. Candico invested US$ 5million to setup a 6. Candico’s brand portfolio consists of: − Confectionery: Frutti Tutti. Belgium for gum-base the world’s largest independent gum base manufacturer. Time Bomb. Gol Maal. Outward foreign direct investment During 2003. The company has a direct or indirect distribution reach in most towns and cities with a population of over 25. During 2004. − Gum: Big Bubble Gum. Germany a world leader in flavors Technical collaboration with Eurobase. Freedom. and Drum Beat All are sold under the umbrella brand Candico. Koffi Toffi. Jumbo Gumbo and Loco Poco. − Toffees/éclairs: Elachi Roll.900 MT confectionery manufacturing plant in Tanzania.000 MT confectionery manufacturing plant in South Africa.

Brooklyn – targeted at the adult segment.fruit. Perfetti India Ltd acquired Tecnova’s shares and Van Melle decided to merge their activities through Perfetti's global acquisition of all Van Melle shares in March 2001. Main activities A manufacturer and marketer of sugar based confectionery and is a leader in the candy and gum segments.is the largest selling candy in India. 2003 Perfetti’s turnover was approximately Rs. cream. strawberry and mango – is the largest selling gum in India targeted at children. Perfetti has two factories in India. Perfetti started operations in India in 1994 as Perfetti India Ltd.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Perfetti van Melle India Pvt Ltd Company name and ownership details Perfetti van Melle India Pvt Ltd (Perfetti) is India’s leading confectionery manufacturing company and is a wholly owned subsidiary of Perfetti S. The company was renamed as Perfetti van Melle India Pvt Ltd.herbal breath freshener .a. Haryana State and Chennai. It is the second largest company in the Perfetti group in terms of sales volumes world-wide.mint.coffee and cream based candy. Products and brand presence Candies: − − − − Gums: − − − Alpenliebe . 87 . Herbasol . a JV with Tecnova India Pvt. Not listed on any SX. 4.non sticky bubble gum in 4 flavors .p.milk and caramel based candy .000 MT/pa. Big Babol . Indian Private Limited Company. Tamilnadu State with total installed capacities of 45. targeted at the teen segment. Centerfresh – in spearmint and strawberry flavors. located in Manesar.mint flavored candy. orange. strawberry and peach flavors. Cloromint . Cofitos .000m. In 2001. Ltd. Italy. Recent performance For FY ending December 31.

Outward foreign direct investment During FY2003. and to increase its manufacturing capacity by upgrading its Chennai plant. followed by Big Babol and Alpenliebe. It spends between 10 to 15% of its net sales on advertising each year. 200m. Center Shock. set up its first manufacturing plant outside India .000 pan shops across the country. With a basket of 13 brands.000m in India. it announced a planned further investment of Rs. Alpenliebe Lollipop. With a focus on innovation and new product development. Perfetti launched 12 products across several categories during 2004. Mentos. The company intends to spend an estimated Rs. During 2004. and Fruit-telta are other leading brands in the Perfetti portfolio. Cofitos. Marbels. Perfetti is positioning the sugar-free gum as an oral care product and maintains that the contents of Xylitol assist in prevention of tooth decay and helps contain bacterial growth.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Center Fresh was the first brand offering of Perfetti to be launched in India in 1994. with its products stocked across 250. the company strives to leverage its international product expertise while adapting flavors and blends to local tastes. a specially formulated sugar-free chewing gum containing Xylitol. 1. which is a wholly owned subsidiary of its Italian parent. Among the 2004 launches was ‘Happydent Protex'.500m over the next two years in marketing and brand building. Perfetti has invested approximately Rs. Pan shops plays a key role in the company's growth. Perfetti India. 6. Three to four more products are expected to be launched in 2005. Alpenliebe today is the largest brand in its portfolio. 88 . Perfetti has a 25% share of the organized confectionery market in India. Big Babol ranks second in size followed by Center Fresh and Chlormint.in Bangladesh with an investment of Rs. Distribution and future outlook Perfetti markets its product to 1 million outlets across India. 20m in advertising to promote “Happydent Protex'” over the next few months. Over the last 10 years. It also forayed into the chocolate éclairs market with “Chocotella” and the digestives market with “Chatarpatar”.

Parle G remains the largest selling cookies brand in the world by volumes.manufactures cookies and confectionery. Bahadurgarh. Products and brand presence • • Eighty percent of Parle’s revenue is from the sale of biscuits and bakery products. Not listed at any SX.manufactures cookies.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Parle Products Pvt Ltd Company name and ownership details Parle Products Pvt Ltd is a Rs. Parle has four factories located in: − − − − Mumbai. Poppins. 7. 2004 Parle’s sales turnover was approximately Rs. Melody. Karnataka . Neemrana. 89 • • . Rajasthan . Parle has 15% market share in the total confectionery industry. Its brands are targeted at the lower and middle price segment. and cocoa and milk based toffees.manufactures cookies. Maharashtra State . sugar boiled confectionery. Indian Private Limited Company. It has 40% market share in the total cookies industry in India. Installed capacities: − Products manufactured at integrated plants and hence installed capacities cannot be ascertained. 8500m. Mangobite and Kismi enjoy a strong imagery and appeal amongst consumers. − Parle has 19 contract manufactures located in different parts of the country out of which 14 for manufacturing their range of biscuits and 5 for confectionery products.manufactures cookies. Haryana State .500m conglomerate owned by the Mumbai based Chavan Family and is a leader in manufacturing and marketing of cookies and confectionery. Recent performance For FY ending March 31. Main activities Parle manufactures and markets cookies. and Bangalore. accounting for more than half of Parle’s sales turnover.

Monaco. Rol-a-Cola. catering to 4.. which started operations in 1929. Krackjack.000 retail outlets directly or indirectly. Wm. Kismi. acquired the confectionery business of Joyco Group. • During 2004. Hide-n-Seek. remains in a slow growth mode. A two hundred dedicated field force services these wholesalers and retailers. Wrigley India Pvt Ltd is a wholly owned subsidiary of Wm. Poland and Spain. Poppins. Marie Choice.500 wholesalers. Spain. Parle seems to be focused on their cookies business as they enjoy a substantial market share of this Rs. This transaction involved Joyco's operations in India along with China. As part of the restructuring. Wrigley Jr. France. Parle G Magix. USA. the corporate head office of Wrigley. Distribution and future outlook Parle has 1. Spain. Wrigely Jr. Italy. 350 billion market in India. Parle’s main brands are as follows: − Cookies: Parle G. Orange Candy. Wrigley India Pvt Ltd and Joyco India Pvt Ltd Company name and ownership details Joyco India Pvt Ltd (Joyco) / Wrigley India Pvt Ltd (Wrigley) Joyco India Pvt Ltd is a wholly owned subsidiary of Joyco Group. USA. Additionally. On the other hand. This acquisition is expected to help in consolidating the brands of both companies in the confectionery market. its confectionery business. Fun Centre and Monaco Bites. 90 • • • . India has moved from Bangalore to Delhi.25. Smoothies and Chox. Both companies in India will operate as Wrigley India Pvt Ltd. Parle G Milk Shakti. − Confectionery: Melody. there are 31 depots and C&F agents supplying goods to the wide distribution network. Mango Bite. which was Joyco’s base of operations. Co. Co.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles • Parle donates 25% of its income to public charities to support education medical care.

Wrigley entered India in 1994 with the launch of Wrigley’s chewing gum.K. and P. Sixty percent of Joyco’s turnover is derived from its flagship brand Boomer bubble gum which it launched in 1995. and Wrigley has a factory in Bangalore. During 1999. Cool Air. Karnataka. lollipop and candy. Wrigley’s Spearmint. chewing gum. Wrigley manufactures and markets a range of chewing gums. Joyco had and approximate turnover of Rs. chewing gums. and Trex chewing gum. Wrigley’s brands are Doublemint. Products and brand presence Joyco’s brands are Boomer bubble gum.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles • Joyco Group earlier named Agrolimen. while it holds a second position in the candy segment. In 2004. Juicy Fruit. 316 million. Spain entered India during 1995 through a 51:49 joint venture General de Confiteria Ltd with the New Delhi based Dabur Group. Joyco has one factory in Nalagarh. and Wrigley – of Rs. Joyco is the third largest sugar confectionery company operating in India. Recent performance For the FY ending December 31. 91 . Spain bought out Dabur's share in the joint venture and General de Confiteria Ltd acquired the status of a 100% subsidiary of Joyco Group. So far Wrigley’s sales in India have not been very encouraging. Solano candy. it launched Orbit. 2003. • • Both are Indian Private Limited Companies. Main activities Joyco manufactures and markets bubble gum. 2 billion. Bonkers soft chews. Not listed on any SX. the company's name was also changed to Joyco India Pvt Ltd. Himachal Pradesh. At the same time. Orbit. and has 10-15% market share in the Indian confectionery market. It has a leading position in the bubble gum and lollipops segments. India’s first sugar-free chewing gum. priced at Rs 5. Agrolimen. Pim Pom lollipops.

Company name and ownership details Gujarat Co-operative Milk Marketing Federation Limited (GCMMFL) is the largest organization in the Indian food industry engaged in the marketing of milk and dairy products. • • • Chocolate manufacturing capacity – 1500 MT/pa GCMMFL has a manufacturing contract agreement with The CAMPCO Ltd for production of its brands. Gujarat Co-operative Milk Marketing Federation Ltd.000 outlets. It is India's leading co-operative marketing federation and India's largest food products marketing organization.183 villages and having 1. and chocolates and confectionery. with a network of 1. Kolkata. Also. with direct coverage in more than 350.000 MT of its chocolates manufacturing capacity exclusive for production of AMUL brands for GCMMFL.95m producer members. Joyco currently has a retail presence in over 400. pan shops and supermarket chains.07m/day. They have regional offices in Mumbai. The CAMPCO Ltd will offer 3. It is a state level apex body of milk co-operatives in the state of Gujarat. GCMMFL has a membership of 12 district cooperative milk producer's unions spread over 10. Wrigley will take advantage of Joyco’s distribution network. 92 . general merchants. Installed Capacities: • Liquid Milk Processing – 6.650 distributors. the company also has a very strong indirect channel serviced through wholesalers. including grocery stores.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Distribution and future outlook Wrigley’s acquisition of Joyco brands will definitely consolidate the confectionery market in India. With a wide portfolio of products they service a range of outlets. Besides this direct coverage. Not listed on any SX.000 retail outlets across the country. especially in Northern India. Chennai and Bangalore. It has the largest distribution setup in the confectionery industry.

Products a brand presence • • • • • GCMMFL currently has less than 2% share of the total chocolate market. GCMMFL also re-launched its gifting brand Rejoice. Fruit n Nut. a gifting brand. which was pulled out of the market two years ago.480 million. GCMMFL is a success story of dairy and ice cream business in India and wants to have another go at its chocolate brand. ghee. GCMMFL also re-launched Éclairs its confectionery brand. powdered milk & dairy whitener. Almond Bar. • GCMMFL chocolate brands (all sold under the AMUL brand) are Milk Chocolate. flavored milk. fresh & UHT milk. flavored yogurt. a wide range of ice creams. yogurt. 2004. chocolates and confectionery and instant foods. • Produces and markets a wide range of dairy and non-dairy bread spreads. as it still needs to get its distribution and product attributes in place before it can make a dent in the chocolate market. GCMMFL is re-focusing on its chocolate business. During FY 2003-04. During FY 2003-04 introduced three new brands to add to its range. Distribution and future outlook GCMMFCL currently poses very little threat to the other two chocolate giants Cadbury and Nestle. a wide range of cheese. 93 . 27.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Recent performance For FY ending March 31. ice creams and processed foods. milk products. Fundoo and Éclairs. GCMMFL had net sales of Rs. Main activities Producers and marketers of milk. Bindaaz. GCMMFL wants a hold in the chocolate market that is seeing new international players like Mars. cooking butter. malted foods. It also has Rejoice.

ITCL. A more broad-based entry has been made since June 2002. and ready to eat meals. ITC’s Foods rolled out its maiden confectionery brand. Cochin. Candyman is available in two variants . Hyderabad. British American Tobacco Co.50m (total net profit of the group) Main activities – Food division Marketer of 45 value added products in four categories: staples. Indian Public Limited Company. ITCL Foods Division does not have its own manufacturing facilities for confectionery products. information technology. Pune. gifting and stationery products.40m (total sales of the group) − Net Profits: Rs. confectionery.Wild Banana and Mango Delight. is an agri-commodity trader with interests in greetings. Ltd holds 45. hotels. India’s largest manufacturer of cigarettes and tobacco products. Ahmedabad.33% stake in ITCL. Bangalore. which it had acquired from the Delhi-based Candico India Limited. paper board and specialty papers. safety matches and essence sticks.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles ITC Limited Company name and ownership details ITC Limited (ITCL) is the flagship company of the ITC conglomerate. During 2002. 15928. snack foods and cookies. Chennai. set-up a separate division for its foods business called ITC Foods. 64704. ITC Foods later launched Candyman targeted at the under 12 children segment. Mint-O is targeted at the young adult segment. • 94 .Mint-O. During 2003. Products are manufactured by contract manufacturers. lifestyle retailing and foods. Uttar Pradesh and National SXs. Calcutta. Listed at the Mumbai. Recent performance FY ending 31 March 2004: − Net Sales: Rs. Delhi. packaging. ITCL made its entry into the branded and packaged foods business in August 2001 with the launch of the Kitchens of India brand. Products and brand presence • During 2002. Mint-O is also available in Lemon and Orange flavors.

hard boiled sugar confectionery. Hindustan Lever Limited Company name a ownership details Hindustan Lever Limited (HLL) is India’s largest and leading Fast Moving Consumer Good (FMCG) company manufacturing and marketing soaps. Listed on Mumbai. cookies in butterscotch and orange flavors. such as Chapati and Roti. Bangalore. which comprises of 35 powerful brands across categories. 19 − Sunfeast brand. foods and chemicals. Ahmedabad. household and personal care products. holds 51% stake in HLL. It is expected that ITCL confectionery business will need a minimum of two years to break even. Since confectionery is an impulse purchase category. Indian Public Limited Company. Distribution and future outlook ITCL's traditional distribution strength has been convenience outlets that sell. • • Unilever Plc. ready to eat meals and jams and preserves. ITCL has strength in terms of distribution of confectionery and is using its vast network of pan. among other things.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles • ITC Foods sugar-boiled confectionery portfolio consists of just two brands Mint-O and Candyman. ITCL has the largest FMCG distribution reach in the country. 19 Atta is wheat flour. and − Kitchens of India brand. and National SXs. ITC’s main brands include: − Aashirvaad brand Atta. Cochin. detergents. − Mint-O and Candyman. Chennai. 95 . and directly services more than a million outlets across the country. tobacco products. one of the leading brands of atta in the country. cigarettes and beedi shops in India. largely sold out of convenience outlets. Delhi. ITCL is believed to be in a good position to distribute its confectionery products. HLL is focusing on a brand portfolio. which caters to customers across various income categories. fertilizers and animal feed. Calcutta. Guwahati. primarily used for making Indian breads.

In this adventure. Therefore. coffee. he is guided by Prof.60million. toffees. Recent performance For calendar year ending December 31. 180. Max candies are among the most popular confectionery brands in India. Max Kingdom is a place full of mouthwatering confectionery and ice cream treasures that have to be continuously guarded against the designs of the Evil Shadow master. 2003 HLL had sales of Rs. 50p and Rs.109. 1. staples and confectionery. Products are manufactured by contract manufacturers. • Distribution and future outlook • • HLL is aware that increasing the distribution reach would be the key to growth. HLL had plans to take its confectionery business to 400.43million. Max candies have an innovative marketing strategy targeting children. mint candies and crackling candy. All are priced at 25p. Max is also HLL’s ice cream brand. 2 and sold under the brand Max. Higgabottom always disciplines him and wants him to behave like a King and herein lies the conflict.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles HLL does not have its own manufacturing facilities for confectionery products. most kids identify with Max being one of them and his struggles and adventures as their own. ice creams. During FY 2003 HLL’s Food Division turnover was Rs. Main activities HLL’s Food Division comprises the business of tea.000 outlets by the end of 2004 and is developing its exclusive distribution system for the confectionery business. Higgabottom. whereas Prof. bakery products. 96 . HLL has a 6% market share in the hard-boiled confectionery market in India. MaxMint and MaxCrackler. such as ChocoMax. The Max brand story is about simple and imaginative play. Max always wants to play and have fun. • • • • • HLL launched the Max Confectionery range in FY 2001. MaxCream. 290m. Products and brand presence HLL brand range includes hard-boiled candies. The brand ambassador is the playful Max lion who rules the Kingdom of Max. and net profit of Rs.

THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles The CAMPCO Ltd Company name and ownership details The CAMPCO Ltd – The Cocoa and Arecanut Marketing & Processing Co-Operative Limited (CAMPCO) is a procurement. CAMPCO set up a chocolate manufacturing factory in 1986 with an investment of Rs. The manufacturing facility allows CAMPCO to manufacturer products of different segment of the confectionery segment – molded. The factory is located in Kemminje/Puttur in Karnataka. 97 . 2 billion. CAMPCO is a joint venture between Karnataka and Kerala Governments which commenced operations in July 1973 encouraging growers in Karnataka and Kerala to take up cocoa cultivation. 116. Main activities A manufacturer and marketer of chocolate and a wide range of cocoa based industrial products. which expired in 2000. • • • CAMPCO had a 10-year contact-manufacturing tie-up with Nestle. which will use CAMPCO’s installed capacity of 3. CAMPCO modified its plant to also manufacture éclairs which used to be manufactured by a contract manufacturer. Recent performance For FY ending March 31. enrobed. − Chocolates – 8800MT/pa out of which 700 MT is for their own brands. Nestle utilized 4. which is an integrated independent facility. Installed capacities: − Cocoa processing – 6000 MT/pa.500MT of CAMPCO’s production capacity. processing and marketing co-operative agency dedicated to cocoa and arecanut crops. CAMPCO undertakes processing of cocoa beans and supplies cocoa and other intermediary products to Cadbury and Nestle. 2004 CAMPCO had net sales of Rs.7m. Not listed on any SX. CAMPCO currently has a manufacturing contract tie-up with GCMMF. éclairs and pan confectionery.000 MT. During FY2003-04.

Delhi. Megabite. Treat. CAMPCO adopted a strategy of "low price point" to market its chocolate brands to the middle-class segment and introduced innovative packaging and a new look to its enrobed chocolate products – “Turbo” and “Treat”. as most of the members of this co-operative organization are from these States.000 outlets throughout the country. Lucknow. Bar. which is aimed at expanding the chocolate market for its brands in India. Éclair. Cream. Hyderabad. Himachal Pradesh. management. Delhi.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Products and brand presence • • During FY2003-04. all sold under the CAMPCO umbrella brand. Instead. and team-building initiatives. Punjab. CAMPCO adopted a new strategy. include: − Chocolate: Melto. During FY2003-04. Another brand. being a co-operative. sales managers and regional heads in areas such as leadership. is unable to match the advertising budgets of MNC such as Cadbury and Nestle. Nearly 40% of the outlets are in Uttar Pradesh. Melto Éclairs. • • CAMPCO also markets a wide range of chocolate products under its own brand and has small presence in different segments of the chocolate market. During FY 2003-04. CAMPCO appointed a Bangalore based consulting company to train its sales representatives. CAMPCO Bar. Bangalore. CAMPCO has 22 area sales offices and regional offices in Kolkata. CAMPCO has a strong market presence in Karnataka and Kerala. Play Time. 4ever. and Uttar Pradesh account for 38% of the total chocolate market of CAMPCO. was launched at Rs 2 for a 9-gm pack under CAMPCO Mini Bar segment. and − Drinking chocolate: Winner. 98 . Distribution and future outlook CAMPCO. Brown Center Éclairs. and Mumbai. a chocolate-coated wafer biscuit. This has helped it garner more than half of its chocolate market in the southern states. Turbo. Haryana. During FY2003-04. described as a protein-rich bar enrobed with milk chocolate to compete with similar products being manufactured by Cadbury and Nestle. and 4Fever. Its chocolate products are sold in nearly 100. Krust. Its main brands. apart from the existing Rs 5 pack. Turbo was also introduced in Rs 3 pack. which is sold at Rs 10 for a 45-gm pack. it is concentrating on event management activities to popularize its products especially in schools. CAMPCO launched Krust.

a holding company belonging to Sunshine Allied Investments. Malaysia.25% of the equity from Network Foods International Limited. 99 . Malaysia could not revive the company’s operations.3m of net losses.000MT/pa The manufacturing facility allows Lotus to manufacture products of different chocolate segments. Lotus has one factory located in Doulatabad. etc. 2003 Lotus had sales of Rs. Listed on Mumbai and Hyderabad SXs. ending December 31. Lotus was 52% owned by Network Foods International Limited. Lotus has been incurring losses over the past 5 years and performance has not been encouraging for this 13 years old company. 30. 20. • • Indian Public Ltd Company. Lotus had obtained a total loan of US$2. Singapore. Ramakrishna acquired 42. such as molded. • Until August 2003. the ownership of the company changed hands and two Hyderabad based businessmen Mr.33m from Network Foods International Ltd during FY1998 and FY1999 towards brand promotion and working capital requirements. Singapore (52%) is a leading manufacturer of chocolate and chocolate-based confectionery in India.800 MT/pa. Durgaprasad and Mr. Recent performance For calendar year. Medak. Singapore and also infused Rs. panned. part of MUI Group. Lotus has a facility for enrobing wafers and cookies. chips. cookies.4m and incurred Rs. Andhra Pradesh State. Installed capacity: − Cocoa processing – 3. D. and enrobed chocolate. A. 20m into the sick company. Despite several efforts MUI Group. During FY 2003. fruit bits. and also has a sugar and chocolate panning facility for nuts.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Lotus Chocolate Company Limited Company name and ownership details Lotus Chocolate Company Limited (Lotus) formerly owned by Network Foods International Limited. which is integrated independent facility − Chocolates – 3. Singapore.

Product and brand presence Lotus markets a wide range of chocolate products under its own brand and has small presence in different segments of the chocolate market. Lotus is looking at a turnover of Rs. On & On. Kajoos. • • Lotus currently has a cocoa processing and chocolate manufacturing agreement with Cadbury India Ltd. Lotus also expects to strengthen its cocoa based industrial based segment and its new management is in contact with the large MNC’s and manufacturers of bakery products. Andhra Pradesh and is currently focusing its distribution in the southern states. Lotus is focusing on strengthening its industrial chocolate segment especially with exports of cocoa butter. 160m in FY 2004 out of which Rs. all sold under the Lotus name. breakfast cereals and confectionery products. It has an excellent market presence in its home state. Super Car. ice cream. Distribution and future outlook Lotus is now focused on regaining lost ground and capturing the low-end market for its brands through a focused campaign in schools. parks. and retail outlets. which is the major revenue earner for the company. Kiddies. include: Chuckles.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 2: Key manufacturers’ profiles Main Activities A manufacturer and marketer of chocolate and a wide range of cocoa based industrial products. and Tango. malted beverages. Its main brands. 100 . Kandos Maltys. 40m will be from exports. Lotus is currently negotiating with a few manufacturers of chocolates in EU to manufacturer chocolates from them in India. The company presently exporting cocoa butter to countries in EU. chocolate.

Phase III New Delhi – 110 020 Tel: +91 11 5100 0034-35-36 Fax: +91 11 5100 0037 Email: optimum@ommindia.ommindia. Durga Prasad Director # 403.raifoods. Ltd.110016 Tel: +91 11 26965158 Fax: +91 11 26965147 Email: sr@balajivictuvals.P. Okhla Industrial Estate.THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 3: Trade interviews APPENDIX 3: TRADE INTERVIEWS MANUFACTURERS: Candico India.com Lotus Chocolate Co. N.com International Marketing Network Mr. Mohan Co-operative Estate New Delhi – 110 044 Tel: +91 11 26950580 Fax: +91 11 26941665 Email: karan@candicoindia. Sanjey Bajoria Director Marketing 41/1623. Diamond House Panjagutta Hyderabad – 500 082 Tel: +91 40 2340 1966 / 2340 4967 Fax: +91 40 2340 1312 Email: hyd1_lotus@sancharnet. Shankar S.com Balaji Victuals Pvt Ltd Mr.com Website: www. D.com Nutrine Confectionery Company Pvt Ltd Mr. N. Sumit Khandelwal Director D-311 Crystal Plaza Link Road. D. Atul Khanna Director 203. Road No.in Website: www. V.nutrinesweets.com Lotte India Corporation Ltd Mr. Karan Gupta Executive Director A-4/B-1.V.com Optimum Marketing Metrics Pvt. Reddy Colony Chittoor – 517 001 Tel: +91 8572 229969 (8 lines) Fax: +91 8572 226646 / 226244 Email: nutrine@vsnl. Ashok Nagar Society N. Siva Mohan Reddy Executive Director PB#38.com Kayempee Foods Pvt. Ltd. Green Park Main Lower Ground Floor New Delhi .C. 234. Ltd. Mr. Sunil Rai President W-28. 7.com Dugar Overseas Pvt Ltd Mr. Mr. Nagar Andheri (W) Mumbai – 400 053 Tel: +91 22 3090 7575 / 2670 5686 Fax: +91 22 2670 7110 Email: bajorias@vsnl. IV Floor. Sirish Kothapally Executive Director A-50/1. Mr.D Scheme.com Website: www..com 101 . Ltd.lotuschocolates.com Website: www. J.S.com Website: www. Mumbai – 400 049 Tel: +91 22 2613 4826 Fax: +91 22 2618 4485 Email: imnindia@rediff.com IMPORTERS/DISTRIBUTORS: Bajoria Foods Pvt Ltd / Virgo Mr. Andheri (W) Mumbai – 400 053 Tel: +91 22 56926778 / 70 / 80 Fax: +91 22 56914975 Email: smk2@vsnl. K.chocomarco. IDA. B. Ravi Sureka Director Plot No. Saswat Sengupta Chief Executive 9-A Connaught Place New Delhi – 110 001 Tel: +91 11 2332 1270 / 2332 6655 Fax: +91 11 2332 7598 Email: saswatsengupta@raigroup.com Website: www. Bose Road Parrys Corner Chennai – 600 001 Tel: +91 44 2530 6338 Fax: +91 44 2534 1135 Email: shankar@lotteindia. General Marketing Manager ‘Dare House’. Kukatpally Hyderabad – 500 037 Tel: +91 40 2308 5739 / 2308 8559 Fax: +91 40 23088581 Email: sirishh@rediffmail.candicoindia.Mr.com Rai & Sons Pvt Ltd Mr. 11.S.

com Essence Empire Mr. J. Jolly Maker Chambers II. 29th Road Bandra (W) Mumbai – 400 050 Tel: +91 22 2640 8879 Sunstar Confection & Trading (Pvt) Ltd Ms.com Website: www. Century Bazar Lane. Mhod. 225 Nariman Point Mumbai – 400 021 Tel: +91 22 2202 7309 / 2202 7335 Fax: +91 22 2281 6122 Email: vrinda@sweetworldonline. Mumbai – 400 018 Tel: +91 22 2493 5546 / 2497 8082 Fax: +91 22 2492 1604 Email: sunstarconfection@indiatimes. Balsara Group of Companies Mr.sweetworldonline. Kaivan C. Sunil Saraogi Marketing Head – Western India 1. K.net. Marg Ghatkopar (W) Mumbai – 400 086 Tel: +91 22 25138455 / 25116795 Fax: +91 22 25139318 Email: kaivanbalsara@yahoo. Vrinda Rajgarhai Director 46.400 025 Tel: +91 22 5660 8260 / 5660 2203 Fax: +91 22 2438 0426 Email: nilima@ essenceempire. Sindhi Colony P.B. 1st floor Kolkata – 700 007 Tel: +91 33 22580350 Fax: +91 33 22580340 Email: rangdev@vsnl. Kurla Industrial Estate L. Jafer Proprietor # 1-8-91/19/1. Strand Road. Joy Palace. Room . Rawdon Street "Shubham" 5th Floor. 225 Nariman Point Mumbai – 400 021 Tel: +91 22 2202 7309 / 2202 7335 Fax: +91 22 2281 6122 Email: vrinda@sweetworldonline. Annie Besant Road Worli.505 Kolkata .THE MARKET FOR CONFECTIONERY PRODUCTS IN INDIA Appendix 3: Trade interviews Rangdev Holdings Pvt Ltd Mr. Road Secunderabad – 500 003 Tel: +91 40 5531 2807 New Regal Stores Mr.sweetworldonline.com Kaivan Foods C. Ramesh Bhai Proprietor 272. Bhat Bazar Narshi Natha Street Masjid Bander (E) Mumbai – 400 009 Tel: +91 22 23475616 Le Chocolat Ms.Co-op. Kaliandass Udyoh Bhavan Premises.G. Bina Modi Director C/o HMA Udyog Ltd E49/11 Okhla Industrial Estate Phase II New Delhi – 110 020 Tel: +91 11 2638 5797 Fax: +91 11 2638 9138 Email: binamodi@satyam. Sajjad Ratlamwala Partner 499. Vrinda Rajgarhia Director 46.S. Prabhadevi. Anil Shroff Director 228-231. Society Ltd.com Vrinka Overseas Pvt Ltd Ms. Arti Manoj Marketing Controller All India “Sun-Ville” 9. P. Leela Thawani Proprietor 8/9.com 102 . Balsara Director 3. Bagaria Managing Director 46.com Ego Yum n Yumi Candy Store Ms.com RETAILERS: Champion Sweet Mart Mr.com Website: www.com Candy Treats / Taurus Confectionery India (P) Ltd Mr. Inside Crawford Market Mumbai – 400 001 Tel: +91 22 2343 3484 Sweet World Vrinka Overseas Pvt Ltd Ms.in Nutty Affair Mr. Jolly Maker Chambers II. Dr. Mumbai ..700 017 Tel: +91 33 302 20300 Fax: +91 33 2280 1853 Email: info@candytreatsindia.

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